The concept of commercial file-sharing or P2P is hardly a new idea. Some of the more recent memories of commercial P2P was Napster, Inc. Towards the end of its beleaguered life, this once proud P2P network teamed up with German Entertainment company Bertelsmann BMG.

This occurred during the latter parts of Napster's life, specifically in October of 2000. Bertelsmann BMG infused a tremendous amount of cash and effort as an attempt to transform Napster into a subscription service.

Things began to dissolve slowly for Napster in May 2002 as Shawn Fanning and interim CEO Konrad Hilbers both threatened to leave the company if the board of directors did not agree to be purchased by Bertelsmann BMG. The threat worked. On May 17, 2002, the board approved the sale of Napster to Bertelsmann BMG.

However, that was as far as the sale would go. In June 2002, a Federal Judge blocked the sale of Napster to Bertelsmann. At this point, Napster was bankrupt, and was placed on the auction block. While Napster was worth over $16 million to Bertelsmann, it sold for only $5 million to Roxio.

The history of commercialized P2P so far has been an effort to appease the RIAA (Recording Industry Association of America.) MashBoxx, PressPlay, Rhapsody, Napster, iTunes are all in some way associated with the mainstream music industry - however little attention has been given to independent labels. Altnet hopes to change that.

Altnet stated in a press release today that it will initiate an advertising fund that will share revenue generated by online advertising with independent music labels. Altnet is a subnetwork of FastTrack that supplies industry sanctioned files - typically for a fee.

According to the press release, the "first-ever online advertising revenue-sharing fund to be split with top independent labels. Among its numerous significant independent label customers, V2, Artemis, Epitaph/Anti, Side One Dummy and Palm, Simmons/Latham, and Koch Media will participate in this fund where they will share the revenue generated from advertising that appears in the user interface of popular Peer to Peer applications."

Altnet licensors will share in the initial pool. The fund will be split proportionately based on content licenses issued whether the music content is offered for sale, trial or for free. The fund will initially serve as a catalyst to develop a business model for P2P resembling Radio that is based upon audience segmentation and media performance.

While everyone might have their own personal opinions of Altnet, it is hard for smaller labels who are already financially struggling to refuse some extra cash.

This story is filed in these Slyck News categories
Authorized P2P :: Other

You can read the press release here.

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