Altnet seeks to reward swapping of licensed content

The first large-scale test of P2P networks as a distribution system for authorized content began recently when Altnet and Kazaa parent Sharman Networks released a test version of what they say is a secure commercial P2P network inside Kazaa. The companies hope to use the tens of millions of Kazaa users to distribute authorized music, movie and game files for paying clients. 

Altnet, which is owned by Brilliant Digital Entertainment, says it has developed a new platform to provide incentives for the swapping of licensed digital content. The company’s Peer Points Manager application, which will be available in June to Kazaa Media Desktop users, meters file uploads on the Kazaa network.

The Peer Points Manager uses Altnet’s TopSearch technology, which permits content owners to purchase keyword search terms that direct users to their content. The Altnet files will show up as gold colored icon files on the Kazaa Media Desktop and search results.

The Peer Points Manager meters these TopSearch file uploads and compensates participants for the use of their computing resources. Each time someone uploads a file from an Altnet user, the user accumulates points, which can be redeemed for prizes or cash. Altnet says the software also lets users control features such as how many people can connect to a host computer at once, and how much bandwidth a user wants to dedicate to the service.

Altnet says it has tested the platform for almost a year and delivered an average of 20 million licenses a month by seeding the Kazaa network with authorized content – mostly computer games. The company claims that the platform is scalable to 20 million licenses a day, supported by a rugged billing system and the ability to handle multiple formats.

According to Altnet, its network uses several digital rights management tools and has become the largest supplier of Microsoft Windows Media files. It insists that participants can choose to opt out of the Peer Points Manager if they wish.

The ongoing conflicts between Kazaa and the record labels make some observers skeptical that Altnet can swing major content deals. Sharman Networks’ January countersuit against the record companies and movie studios accusing them of antitrust law violations sprang partly from the fact that it would not do business with Altnet. But I think that most content owners will eventually be swayed by the success that companies like Atari have had using P2P networks as distribution systems for its paid content. Altnet’s customers have included Atari, Sanctuary Records, artist Ice T, and Microsoft, which has used the network to distribute promotion files.

Ultimately, this could be a fine way to demonstrate the usefulness of P2P networks to those who want to distribute copyrighted material. Altnet’s CEO Kevin Bermeister has been hoping to use Kazaa to swap authorized files since he first started working closely with Sharman Networks.

My greater concerns about the Peer Points Manager centers on its ability to protect users’ privacy and not collect or track any surfing habits or other personally identifying information. Altnet of course, says it would never do this. But the company was caught out of bounds last year when Brilliant revealed in a federal financial filing that those who downloaded Kazaa’s Media Desktop also got software that connected to Altnet’s secondary, private marketing network. Altnet and Kazaa lost the confidence of users by not bothering to tell them this. As a result, there was much understandable concern that this network could inject spyware or other monitoring and surveillance software onto the machines of Kazaa users without their knowledge.

Altnet said all the fuss about profiling users just amounted to companies buying search terms inside Kazaa and having their product links returned with search results. But Altnet is interested in monitoring strategies. Strapped for cash, it has acquired the rights to a 1999 patent for technology that identifies files on P2P networks using a digital “hash” determined by content. It now wants to license the rights to this technique to other P2P networks.

Altnet should consider winning back the total confidence of customers by submitting its source code to independent security and privacy reviewers. A promising commercial P2P network that offers content owners security should also assure users that their machines would not be compromised or monitored by a new wave of file swapping applications.