“The advantage for content providers is that they have an outlet for distributing high-quality video instead of having to store and distribute such massive files themselves,” said Yankee Group analyst Nitin Gupta. But Gupta said that it could be a tough sell among film studios well aware of the reputation of file-sharing networks.

Former Naptser investor Bertelsmann AG is launching a new file-sharing service to address the intellectual-property issues that had plagued popular music-swapping services in the past.

Dubbed Gnab (or “bang” in reverse), the service will be offered by Bertelsmann subsidiary Arvato AG later this year. It will combine a centralized Internet download platform with a decentralized peer-to-peer (P2P) network.

Customers including ISPs, TV stations, and mail-order houses will be able to use the platform to distribute copyright-protected digital content such as music and movies.

Legal Distribution

With content stored on a centralized server, Gnab will control the protection of all copyrights, while the decentralized file-sharing component will let content providers distribute large files, such as films or games.

Licensed partners thus will be able to use the Gnab platform to sell their copyright-protected downloads, with consumers dealing with a particular Gnab network partner instead of the content provider.

Yankee Group analyst Nitin Gupta compared Gnab to a similar service provided by Snocap and Napster founder Sean Fanning. “The idea is to strike deals with record labels or film studios and establish a licensing platform,” he said.

Outlet for Video

While the licensing control is maintained by the platform provider, content can be distributed over P2P networks, which can share a song or movie with certain restrictions so that the rights are not transferred when the content is exchanged, Gupta explained.

“The advantage for content providers is that they have an outlet for distributing high-quality video instead of having to store and distribute such massive files themselves,” he said. But Gupta said that, while the advantages of such technology are clear, it could be a tough sell among film studios well aware of the reputation of file-sharing networks and illegal content sharing.

“It will be interesting to see if the film companies are willing to rely on a P2P network to protect their valuable assets,” said Gupta.

Arvato already has access to the music catalog of Sony BMG, partly owned by Bertelsmann, and some one million songs in that collection. But the company faces stiff competition from the likes of Apple and its iTunes service, which dominates the music-download business.

The iTunes store recently expanded to provide video downloads in conjunction with the launch of the new video iPod.
By Jay Wrolstad