Morpheus to Add Paid Music Site

Hoping to slough off legitimacy concerns and make partners of its opponents, StreamCast Networks, the company behind the popular peer-to-peer software Morpheus, said Thursday that it plans to begin distributing music protected by its own digital rights management technology.

The company said it is launching a new site where artists and labels can distribute their works on the Morpheus network, "wrapped" in the company's digital rights management, called CintoA, or "content into application." The content providers will be able to set the rules for the distribution of their work, including the fees they charge users to copy the works. The content distributed in CintoA is due to be available in April.

"We are looking for common ground with content providers," said Steve Griffin, chair and chief executive officer of Franklin, Tennessee-based StreamCast.

Consumers will still be able to download Morpheus for free and swap any number of digital files. However, the new MusicCity.com site will serve as a music portal where independent artists and labels will offer their copy-protected works.

Artists hoping to distribute their wares to Morpheus's huge network of users must send the content to StreamCast to be "wrapped" in its DRM for around $1000 per work, Griffin said. Once it is distributed, the artists will be able to keep 70 percent of the profit from selling copies of their works, and StreamCast will get the remaining 30 percent, he said.

"Peer-to-peer is, without a doubt, the most cost-effective way to exchange content in the world," said Griffin. "We are so excited because we think we have the opportunity to become the next Internet."

Risky Business

StreamCast's new business direction comes as the company is being poked and prodded by a lawsuit from the powerful music and movie industries over the distribution of their copyrighted works. Although the company is planning to start its more legitimate music distribution business with content provided by independent musicians and labels, the company admits that deals with the Big Five labels would be needed to satiate the musical tastes of users. It remains to be seen if the big players would move from litigation to business negotiation, however.

Despite this, Griffin said that he is "eternally optimistic."

"We forget, in the frenzy of issues, that technology companies and content companies need to find something in common because neither one of us can exist without the consumer, and we need to make the consumer happy," he said.

Griffin is guessing that users are happy with the peer-to-peer network, given that the new edition of Morpheus's software, Morpheus Preview Edition, racked up 25 million downloads in the first ten days in which it was made available. The company released the update earlier this month.

Morpheus Preview Edition is based on the open-source Gnutella technology, and is compatible with other technologies, Griffin said.

With Morpheus still alive and well, and able to trade numerous types of content for free, it remains to be seen whether users will opt to plunk down cash for copies of works protected by StreamCast's new DRM. But Griffin remains hopeful.