Cashing in on P2P

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Music, video distributor Intent MediaWorks lands $10M.

Intent MediaWorks, whose software is used to distribute video and music produced by the likes of Diddy (formerly with a “P.”), Avril Lavigne, and 50 Cent, has closed on $10 million in series B funding, the company announced Monday.

Leading the series B round were Greycroft Partners, SoftBank Capital, BDMI (Bertelsmann Digital Media Investments), and Allen & Co.

Three-year-old Intent is seeking to turn P2P networks, like Kazaa, where users regularly swap videos and music for free, into viable marketplaces for music producers and the companies that distribute their songs.

“Historically, P2P has received a bad rap,” said Drew Lipsher, a partner at Greycroft, based in New York City. “At its core, P2P is a distribution system. It’s no different than putting CDs on pallets and shipping them to record stores. From my perspective, I look at P2P and social networks as the next step in the distribution of digital media.”

What Intent offers to music makers and distributors, said Greg Freishtat, executive of Atlanta-based Intent, is way to tap into popular P2P channels that function within the shadowy area of illegal downloading.

Blurry Boundary

The boundary between illegal and legal has blurred as P2P networks have gained wider use. This month, iPod maker Apple and music publisher EMI agreed to sell higher-priced, higher-quality versions of music tracks stripped of digital copyright protection technology.

Intent can tailor marketing packages according to what a distributor wants, including sandwiching songs into advertising or concert information or an artist’s profile. Likewise, Intent’s pricing model is flexible depending on the target consumer. Pay-per-play might be negotiated on one web site and an advertising-supported placement on another.

Intent then divides revenue with partner distributors. One such partner is Nettwerk Music Group, which distributes Avril Lavigne and Bare Naked Ladies.

Mr. Freishtat said his company does not pretend to know which distribution method will win in the competition to sell consumers music and video on the web.

“We’re not betting on Bit Torrent, 99-cent tracks, advertising, or subscriptions,” he said. “We’re not saying we have the answer to how digital distribution will work.”

Mr. Freishtat is betting, however, that Intent can take advantage of the wide audience outside Apple’s iTunes music and video marketplace, which, he said, commands less than 5 percent of the overall music market.

The one-price-fits-all model championed by Apple and others is “inane” in a world where the price of a bottle of Pepsi can vary depending whether it’s purchased at a hotel, supermarket, or vending machine, Mr. Freishtat said.

“It’s going to unravel,” he predicted.

Source: http://www.redherring.com/Article.as...sp%3Bin+on+P2P