Despite industry watchers reservations over the ability of companies like MashBoxx to lure people conditioned to accessing free downloads into for-pay content services, Rosso said the market is ready for just such an offering. By giving consumers a P2P interface similar to the illegal services, and offering a wide range of free content, he said that users will be convinced to change their habits and begin forking over dollars for music and video files."Almost as much as any free downloads, its been that unique file-sharing experience that has kept people so loyal to these platforms." Using MashBoxx software, Rosso said customers will be allowed to download and listen to a song five times before they are asked to pay for it. The free music files are protected against copying, or transfer from a PC to mobile device by MashBoxx until a user has paid for them. Once purchased, the files are released with a DRM software wrapper that allows a customer to use, but not duplicate, the content. In order to prevent network users from trading unlicensed content, MashBoxx will employ an "audio fingerprint" technology developed by Philips Electronics that examines every file on the companys servers in an effort to track down unauthorized copies of songs and delete them from its database. Rosso claims the technology is 99 percent accurate at discerning copyrighted materials from other files. MashBoxx has already signed a distribution agreement with recording house Sony BMG, and Rosso said the firm has similar deals on the table with EMI Group and Warner Music Group. However, the executive said that part of the attraction of services such as MashBoxx, as with illegal file sharing networks, will be the range of other content available alongside the copyrighted materials, such as music from independent artists and eventually movies and other video content. "Between 80 and 90 percent of the content on traditional file-sharing networks was, in fact, legal," said Rosso. "Essentially were offering users the ability to find all of that same great stuff and have it for free in a safer environment than before and to pay for downloads where appropriate; thats what will bring people over." Despite his belief that MashBoxx will take off, Rosso said that it has been hard for the company to make recording companies understand how the firms file-sharing system works, and he said that the process of educating those firms about a for-pay P2P music service has been the most significant obstacle to getting the product to market. Television and movie producers have been more open to the idea, he said, and as a result Rosso believes MashBoxx will soon win content distribution deals with major film and TV studios. Market watchers observed that it will be hard for legal P2P services such as MashBoxx and iMesh to convince experienced file-sharers to begin paying for content theyve been getting for free, and to convince content producers that their software is capable of thwarting piracy, but said there are some potential advantages to the companies emerging business models. "You have to step back and consider [P2P] technology separately from how it has traditionally been offered to consumers," said Susan Kevorkian, analyst for Framingham, Mass.-based IDC. "As P2P services move to a paid model, you see efficiencies and benefits for the companies offering the services, such as being able to leverage a network of users for content distribution versus a central download, and for reaching out to existing users of these services to introduce those people to paid models." Yet, the analyst said that people have been using P2P networks primarily because theyre easy to navigate and the content has been free, and believes that when you take away some those benefits to the consumer and replace them with a paid service, "it becomes a very different ballgame." Kevorkian said that other forms of illegal download networks, including smaller operations shared among people who actually know each other, such as college students, will also pose a continued threat to paid file-sharing services. "Even in this environment after the Supreme Court decision, we expect that consumers who want to find free music online will do so through different types of networks, perhaps smaller or more private networks that are under the radar of the authorities," she said. "For paid online music services, companies will need to make the experience of using [their products] more worthwhile to drive adoption and help this market to take off." Check out eWEEK.coms for more on IM and other collaboration technologies.
"We believe these people will embrace new services that can retain the same experience as file sharing, with the high volume of content and the freedom of navigation and interaction within a community of users," said Rosso.