Napster Founders Target Hollywood

Undaunted by the criticism and controversy surrounding Napster, the Internet music-sharing company they founded, Bill Bales and Adrian Scott have announced the impending launch of AppleSoup, a venture that will bring Hollywood into the age of file-swapping.

While necessarily tight-lipped about the exact nature of the content to be offered through the new company, the fact that former Universal Studios, Inc. chairman Frank Biondi is one of the principal financial backers suggests that AppleSoup may do for movies what Napster did for music.

What distinguishes the new venture from Napster is that consumers will be required to pay for files swapped over the AppleSoup network. “Harnessing the peer-to-peer platform to distribute information over the Internet has enormous potential, as anyone can see from Napster’s meteoric user base,” said Biondi, currently chairman of Waterview Advisors, the company that provided part of AppleSoup’s $2.5 million (US$) seed money.

“The reason the entertainment community has yet to embrace such services has been a fear of copyright infringement,” Biondi said. “AppleSoup has succeeded in finding a way to offer a depth of content to consumers, without violating anyone’s rights or intellectual property.”

Ready for Digital Close-Up

The new company, to be launched by fall, is designed to enable content owners to distribute their work digitally while giving them control over their intellectual property through digital rights management software. Still battling critics who say his original company blatantly violates U.S. copyright law, Napster owner Bill Bales is carefully positioning this new venture as a “copyright-friendly approach.”

Although the new model closely parallels Napster’s file-swapping service, Bales said AppleSoup, while allowing “anything digital” to be distributed via the Internet, ensures that content owners will make money from each transaction involving their property.

In a statement, Bales and Scott said AppleSoup’s “technical advances allow content owners to control, distribute and even sell their content via AppleSoup’s extremely scalable peer-to-peer network.” Without going into full detail, the company claims it will connect consumers’ hard drives to create a “global, virtual library of non-infringing content.”

AppleSoup will operate by directing members that are looking for a specific piece of digital content to another user’s computer, where the information can be retrieved. The new company will not offer music.

The Digital A-Team

Bales and Scott have assembled a highly credible team of investors, including some from the Hollywood elite and others who have proven themselves as Internet pioneers.

Among the participants in AppleSoup’s seed round are Bill Krause, president of LWK Ventures, well known as the former president and CEO of 3Com Corp; Fred Gibbons, president of Venture-Concept, and an early investor in such industry heavy hitters as Yahoo! and Fogdog.com; John Valenti, co-founder of Creative Planet, and son of Jack Valenti, president and CEO of the Motion Picture Association of America; Brian Pinkerton, chief science officer at Excite@Home and inventor of WebCrawler, the Internet’s first search engine.

Bales called the team’s association with AppleSoup a “great fit, and one that validates content owners’ support for our copyright-friendly approach.”

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