Napster Founder’s Snocap Melts

The recent series of good news stories about musicians taking firmer control of their music’s distribution, and music minus DRM taking off in sales, has been good for the fan and good for the artists. For Snocap, not so much.

Though Fanning’s company offers a way for artists to sell music online, it appears not enough of them have taken up Snocap on its service. Valleywag picked up on rumors of layoffs at the company, and that it is now up for sale.

"This explains why we haven’t seen Mendelson at many parties lately," Valleywag said of Snocap’s other founder, Jordan Mendelson.

CNet later confirmed the layoffs of 60 percent of Snocap staff had taken place. And they won’t say no to a sale, either:

"Snocap has received interest from several companies and is pursuing that," said Susan Celia Swan, a company representative.

The problem with music sales is the paradigm shift taking place in the industry. A band can give away two or three MP3s, and support itself with touring and merchandise sales. They don’t need a Snocap to give away music.

Prince did well after handing out about 3 million CDs in England, selling out 21 shows and leaving music industry executives slack-jawed.

MySpace announced a deal with Snocap that will allow them to sell music downloads directly to fans through their profile pages.

Through the partnership, Snocap provides digital music retail tools, such as HTML code and DRM, to allow artists to set up online stores and sell their music in mp3 format.

Snocap also runs songs through a database to verify the song is an original, and not a cover of a copyrighted song.

Zealous fans can join the promotional efforts by using HTML code provided by the band to sell music from their page as well.

Artists can set their own price for the music, say 99 cents per download, or $12 for an entire album. Neither company said if they would charge the artists a commission.

The MySpace/Snocap music service is expected to be available in the U.S. by the end of this year.

“MySpace has become one of the largest promotional tools for artists and labels to distribute their music to fans,” said Chris DeWolfe, chief executive officer of MySpace.

“By introducing a powerful commercial tool set into the industry, we expect to see artists translate their community reach into sales, ultimately allowing more bands to make a living and connect with fans.”

“Up until now bands faced the challenges of content availability, technology and distribution,” said Tom Anderson, president of MySpace.

“This music service enables artists and labels to oversee their own commercial and distribution platforms while lowering the barriers for all bands to sell music directly to their fans in a way that’s easy and totally legal.”

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Snocap says the agreement marks a major step forward for the music industry in its ongoing commitment to provide consumers with a deeper, more compelling digital music experience.

“Warner understands the value SNOCAP provides to rights holders, peer-to-peer services and consumers alike. We look forward to working with them and the rest of the recording industry to help drive the expansion of the online music marketplace,” said Snocap CEO Rusty Rueff.

Napster, which faced a world of legal troubles after the peer-to-peer network gain huge popularity, facing pressure from music industry artists like Metallica. The quartet of deals with major music labels is aimed at avoiding those same legal disputes.

“We support Snocap’s innovative approach to enabling services that offer consumers all the benefits of the peer-to-peer experience with the comfort of knowing that they can enjoy it in a legal and trusted environment,” said Alex Zubillaga, Executive Vice President, Digital Strategy and Business Development for WMG.

Fanning hopes the arrangement will help independent artists and lesser known musicians to reach notoriety.

“With the music of all four majors and our ongoing effort to add indies and individual artists, we can turn our full attention on helping new services reach consumers with the depth and breadth of content that they don’t have legitimate access to now,” said Fanning.

As part of the agreement, WMG will deliver and register its music with Snocap, giving Snocap-enabled retailers the opportunity to offer WMG’s music to consumers.

Financial terms of the deal were not disclosed.

For artists and labels that want to have their works managed from a central database, Snocap offers them the ability to set the rights allowed for a given work.

To that end, Snocap has opened its digital registry today. This clearinghouse could make a great deal of content available. Music retailers and P2P networks would not have to maintain individual relationships with every rights holder.

“Individual artists and labels, big and small, finally have a one-stop opportunity to offer their music over the Internet to fans across the world,” said Shawn Fanning, Chief Strategy Officer for Snocap.

“This registry is key to creating a world of authorized peer-to-peer networks that will attract music fans en masse – enabling consumers to share and discover new artists in much the same fashion as they did with old P2P – but done in a way that respects the rights holder.”

Major record labels Universal Music Group, Sony BMG and EMI, and leading independent labels and aggregators including TVT, Rykodisc, Artemis, Nettwerk and IODA and others have already begun to register their catalogs with Snocap.

But one issue has to be addressed. The various P2P services where trading takes place have to use the Snocap system, and there is no legal compulsion for them to do so. It isn’t likely that users of P2P will warmly embrace any sort of limiting technology.

Those that prefer to obtain music in a legal manner most likely utilize services like iTunes or MSN Music already. Snocap could offer those and other for-pay services more options for managing the music they sell. A rights holder could designate a song for a limited number of plays before it would have to be purchased, for one example.

David Utter is a staff writer for WebProNews covering technology and business. Email him here.

While music companies want to have access to the millions of users on peer to peer (P2P) networks, they don’t want to see copyright infringement run rampant.

Snocap is one attempt to manage that risk. Labels like EMI have their works digitally fingerprinted with Snocap’s technology. P2P networks would sign up with Snocap, and as songs are traded through the network, users would be charged a predetermined price for each track.

The obvious question would be this: Will P2P networks sign up with Snocap? Significant legislation with draconian punishments for unlawful file sharing would have to be enacted and enforced to reduce the appeal of freely trading songs.

And while labels are signing up for Snocap, no P2P networks like eDonkey have done so yet. Could a big business like Sony or Universal have plans for a legal P2P network in development?

David Utter is a staff writer for WebProNews covering technology and business. Email him here.