For a year, Edward Kozel valiantly tried to keep computer users from illegally downloading music. His antipiracy company, C-Right, infiltrated networks using the peer-to-peer technology that can be used to share files illegally. Once there, C-Right effectively blocked downloads of unlicensed content on behalf of its entertainment clients.
But for every download thwarted by C-Right and others, countless more proceed unhindered. Illegal files still account for an estimated 90% of the music download market (see BusinessWeek.com, 1/22/07, "Making a Ruckus in the Music Business"). Entertainment executives grew frustrated with battling downloads a few at a time, Kozel says. Representatives of one music label even told him they no longer planned to spend money on blocking downloads.
If You Can’t Beat ‘Em…
So Kozel adopted a different tack. If he couldn’t keep people from using file-sharing technology to chase free music, then he’d find another way to help clients make money from the technique. "There was this large market for the labels, we just needed to give them a chance to commercialize it," Kozel says. In August, Kozel relaunched his company with a new name, Skyrider. And this month, backed by $20 million in venture funding, the startup unveiled a product that lets content owners include ads in video files over peer-to-peer networks.
Skyrider is one of a growing number of companies trying to deliver ads over the peer-to-peer services once deemed the agents of piracy. Among them is MediaDefender, an antipiracy company acquired by ARTISTdirect in 2005. Last summer, MediaDefender launched a program that returns licensed videos or songs, often sponsored by advertisers, to peer-to-peer searches for that artists’ work. Among its first promotions: a Jay-Z video sponsored by Coca-Cola (KO).
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