By Harry Rubenstein
December 4, 2005, Updated September 13, 2012

Nareos’ CEO Alexander Lazovsky: I personally believe that there is no need to fight piracy. I think it’s better to provide people with a better service.18-year old Steve Brown is sitting in front of his computer in his bedroom in Boston searching for British hip-hop artist Lady Sovereign’s latest single on his favorite file-sharing network.

Brown, having amassed an expansive collection of licensed music collection for free, is just one of the 400 million people worldwide using peer-to-peer networks to trade and share media files, many of them illegally. Users like him are the ire of the music industry, which has been aggressively fighting the epidemic of illegally downloaded digital files.

This time however, something is different. First of all, the single he ultimately decides to download is paid for and legal – and downloads fast. And after Brown’s download concludes and he clicks on the file to listen to Lady Sovereign, a pop-up window appears providing him with detailed information about the artist and the album as well as recommendations for other musicians that he may like.

This feature comes courtesy of Israeli start up Nareos’ PeerReach solution, which enables legal music downloads on peer to peer (P2P) networks, and is expected to be a useful tool in convincing the millions of illegal downloaders to go legit. P2P is the commonly used name for downloading software, MP3s, movies, unlicensed software or other files directly from other users on the Internet. Files are not stored on a central server but are exchanged directly between users.

P2P services such as Edonkey, Limewire, Kazaa, and imesh, act as a middle man and a communication hub for users to share – more often than not – illegal files. While the technology of such programs is legal, the abuse of it by users sharing illegal files is not.

Nareos was conceptualized by Nareos’ CEO Alexander Lazovsky and two close friends in 2003, before the advent of Apple’s iTunes, when almost all digital music being downloaded was illegal. The group decided that it was important to develop a platform and the technology that enabled a legal download of copyrighted material. Nareos was established in 2004 through privately raised funds.

Though not its original intention, Nareos’ technology is now aiding in the battle against online music piracy.

“Our aim is not to fight piracy,” Lazovsky told ISRAEL21c. “We provide a platform that allows deploying DRM (digital rights management – the term for any of several technical methods used to handle the description, layering, analysis, valuation, trading and monitoring of the rights held over a digital work) protected files to P2P networks.

“We do not try to stop illegal downloads. I personally believe that there is no need to fight piracy. I think it’s better to provide people with a better service. When you compare the numbers, you can see that the people who buy music on iTunes are also the same people who download music on P2P networks. What I am trying to say is that people who download music for free are ready to pay and ready to buy. All that is needed is a good service. It’s not enough to just charge money for music, you need to provide additional services – and this is our cause.”

What will make a user switch to PeerReach? When a user searches for files on P2P networks, the files with the faster download speeds are always at the top of search results and users are more likely to select files with quicker speeds. If you search for one of the PeerReach supported files it is most likely to be found at the top of the search results due to the fast download speeds that are offered.

PeerReach’s technology promotes legitimate content to the top of P2P file lists, at times, charging 99 cents for extremely fast, high quality and virus-free downloads and other times, offering the file for free as well as providing recommendations based on their personal tastes.

“We want to give people the opportunity to evaluate music on peer to peer networks. They have access today to millions and millions of files and they can download it for free of course, but many times the download time is not sufficient and sometimes if you download a full album in an archived format you can get viruses.
We license content from record labels and, based on our technology, we deploy them to all of the file sharing networks. People enjoy extremely fast downloads, there are no viruses and we deploy files of CD quality,” said Lazovsky.

With distribution agreements with online music stores like CD Baby, eLabel INgrooves and international digital music distributor Digital Rights Agency, Nareos’ catalog stands at over a million tracks. The idea is to present a solution to independent record labels so that they will be able to distribute music for promotional services. Currently, there are thousands of files for free.

Lazovsky does not believe that the price model on P2P necessarily has to be the same as on iTunes, the world’s most popular online music store, and he believes that there are substantial benefits to offering music for free. And that’s where Nareos’ business to business plan comes into play.

“Even giving away music for free on peer-to-peer is ok because you can analyze the demand. The fact that there are 400 million people worldwide using peer-to-peer, and 10-15 million people at any given moment, means that there is a huge demand for digital music on peer-to-peer. The good thing about this is that this demand can be analyzed,” said Lazovsky.

Nareos has developed a very sophisticated data mining system that collects information about global peer-to-peer file sharing activities – what people are looking for, what they are downloading, and what is the geographical distribution of the download.

“If people in California who download Shrek also download Eminem – and if you have this information – it can be really valuable to some companies. For example like Walmart, they can put a Shrek movie near a display of Eminem CDs and this may increase their sales.” said Lazovsky.

Nareos is not alone in trying to get a piece of the digital music market. Snocap, a US digital media company founded by Napster creator Shawn Fanning offers similar technology. Israeli-based imesh, one of the most popular P2P programs, recently went legit, allowing only licensed music to be traded and charging 99 cents a download, but Lazovsky maintains that Nareos has an edge.

“The key difference is that people who use P2P software like the fact that they can switch from one program to another. Nareos technology is everywhere because we support all the networks and don’t have a proprietary application,” said Lazovsky.

Although he hasn’t been in touch with the Recording Industry Association of America (RIAA), the trade group that represents the US recording industry that has sued approximately 13,000 people in the United States suspected of sharing copyrighted works, Lazovsky believes that because Nareos is offering legitimate sources of licensed music, they will embrace Nareos’ technology.

While Nareos is currently focusing on digital music, Lazovsky said he hopes to start using their technology for audio books and movies in the near future.

In the meantime, music downloaders like Steve Brown may find that it’s time to switch from illegal downloads in favor of the superior download speed, consumer recommendations and quality of Nareos’ PeerReach.

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Jason Harris

Jason Harris

Executive Director