Kazaa Strives For Legitimacy

Niklas Zennström, Janus Friis and Priit Kasesalus created the original Kazaa in 2001. As the recording industry began focusing its legal muscle on the popular file-trading service, the founders sold it to off-shore company Sharman Networks before moving on to their next big project, Internet phone service Skype.

Because it was incorporated on the tiny South Pacific island of Vanuatu, it was thought Kazaa might be protected from the recording industry’s legal wrath. However, Australian courts pursued the company for copyright infringing activities, as did the RIAA. Sharman eventually sold Kazaa to Brilliant Entertainment, whose subsidiary, Altnet, recently transformed the one-time P2P into a subscription business.

Sound familiar?

Of course, Napster followed a similar route. As the first peer-to-peer service dedicated to facilitating music file exchanges, it quickly felt the power behind the recording industry’s litigating sting. Today Napster sells downloads as well as monthly subscriptions, and, although songs purchased from the service are not copy-protected, the tunes downloaded on the subscription plan are wrapped in digital rights management technology.

The reborn Kazaa is also offering a subscription service offering all-you-can-download songs and ringtones for $19.98 per month. Like Napster’s subscription service, the new Kazaa uses DRM technology, which in this case limits the playing of the songs to three computers. As with many music subscription services, the DRM factor means the songs stop playing if the user cancels the subscription.

Unlike Napster’s subscription service, songs downloaded from the new Kazaa cannot be played on portable devices.

So, what’s the point? Being able to transfer songs to portable devices has always been a must-have feature for online music services. Subscription services such as Napster and Rhapsody tether their downloads so they can be transferred to mobile devices. Like the downloaded songs on their computers, the tracks transferred to mobile devices cease to play once the subscription is canceled.

Evidently, the company thinks multiple methods of payment will make the new Kazaa a winner.

“… We know that people originally got onto P2P because it was quick and convenient to use,” Altnet CEO Kevin Bermeister told Pollstar. “So it made sense that payment also had to be quick and convenient. Our research showed us that just payment by credit cards was inconvenient to many. But many times that’s all they’re offered.

“We’re also using payment via cell phone and ISP billing. This is the way we plan to get our subscriber numbers, by drawing on people who don’t use any of these applications at the moment.”

Maybe so. But until Kazaa can offer portable device playability, it’s limiting its users to playing songs only on three computers. Hardly the road to success in today’s iPod world.

Click here for the Kazaa Web site.