Improved Morpheus client due by midyear

StreamCast Networks is preparing an upgrade to its Morpheus file-sharing software that will allow users to search further across the peer-to-peer network for songs and other files, making it easier to locate obscure or rare recordings, Streamcast Chairman and CEO Steve Griffin said Saturday.

The company also is preparing a Web-based, “remote control” version of its software for PDAs and mobile phones. While away from home, users will be able to instruct the Morpheus client software on their PC to locate and retrieve files for playback when they return, Griffin said. Both enhancements are due by midyear, he added.

Like some other file sharing services, when Morpheus scours the Internet for a file it looks at a “cluster” of only about 15,000 PCs, even though as many as a million Morpheus users may be online at any given time. Griffin said. While that’s often enough machines to find a popular song, for example, more obscure files sometimes don’t show up.

By midyear the company will introduce an upgrade to its client that allows “cluster-hopping.” If the Morpheus client doesn’t find what it’s looking for in the user’s local cluster it will hop further afield to different clusters until it finds the file, Griffin said, in an interview at the Consumer Electronics Show.

The update will likely include other tweaks intended to boost the performance of the software and make it easier to use, he said. It will also be made smaller and therefore easier to download, Griffin said.

The new features may be welcomed by users but the recording and motion picture industries will probably be less than enthusiastic. They are suing Streamcast, along with other popular file-sharing services, in a U.S. district court for allegedly contributing to mass copyright infringement.

On Friday, the judge overseeing that case ordered that Sharman Networks Ltd., which offers the Kazaa peer-to-peer software, can be included in those proceedings. Kazaa had argued that it lies outside of the court’s jurisdiction because the company is incorporated in the small South Pacific island nation of Vanuatu and has no substantial ties in the U.S. Grokster, another popular file-sharing system, is also a target of the lawsuit.

Morpheus had as many as 35 million active users in December, according to Griffin. He said that’s about the same number it had amassed just prior to February of last year, when it had to rebuild its user base from scratch after losing its customers when it switched to a new peer-to-peer technology, he said.

StreamCast so far has incurred some $3 million in legal costs to battle the case, Griffin said, and for a time last year its future looked “suspect” because of the burden imposed by the fees, he said. It makes money selling advertising and would be profitable were it not for the legal costs, he said.

With motions seeking to conclude the case now filed by both sides, much of the legal “heavy lifting” work has been completed and StreamCast is on more solid ground financially, he said. If the case goes to trial, however, the legal fees could start climbing once more, he acknowledged.

Friday’s order about Kazaa may clear the way for the judge to make his next move in the case, Griffin said. He can approve a motion by StreamCast to dismiss the suit, approve a motion by the entertainment industry to have Morpheus shut down, or send the case to a jury trial. A ruling on that could be made in as little as six weeks’ time, Griffin said.

If the judge were to rule that Morpheus should be shut down, StreamCast has no sure way of ending the service, according to Griffin. Unlike the ill-fated Napster service, Morpheus does not rely on a central server for a list of the files in its peer-to-peer network, making it harder to pull the plug on its users’ activities, he said.

One potential option would be to offer a software update to users that “breaks” their Morpheus client, rendering it unusable. But word of such an update would likely be spread quickly among users, meaning few would actually download it, Griffin said, adding that it’s not an option he would like to have to resort to.

He stopped short of saying that users are breaking the law by sharing copyright-protected material, but acknowledged that some may be making “bad choices.” He argued that those choices are not StreamCast’s responsibility.

“Once the software is downloaded, that is the last involvement they have with me,” he said. “We don’t have anything to do with what they trade.”

Unfortunately for him, the entertainment industry doesn’t see things the same way.