The New Face of File Sharing?

For years, Wayne Rosso has been the face of evil to the major record companies.

Now, his beefy, half-shaven mug is the labels’ newest sign of hope.

Rosso is the driving force behind Mashboxx, a company that wants to help the labels wring some cash out of the world’s most popular file-sharing networks. Those networks have been hotbeds of music piracy, but Mashboxx would turn bootlegged tunes into legal downloads that users could sample, buy and share.

On the surface, the 56-year-old Rosso seems an unlikely choice to help the music industry turn its “peer-to-peer” problems into profit.

Before founding Mashboxx last year, Rosso was the wisecracking president of two companies whose file-sharing software helped fuel online piracy: Grokster and Optisoft, the creator of Blubster. He was the Clown Prince of Peer-to-Peer, a widely quoted quip-meister who pilloried the music industry daily as being dimwitted, shortsighted, slow-footed and, well, evil.

“I would lay awake at night thinking of the most incendiary things I could possibly say and hurl these Molotov cocktails out there, knowing that the media would grasp on it and it would spread,” he said.

Long before he was cashing Grokster’s paychecks, however, Rosso was playing for the other team. He spent more than 20 years as an entertainment industry publicist, touting the likes of the Bee Gees and New Kids on the Block.

And even when he was promoting Grokster and Blubster, Rosso was working behind the scenes to convert the major record companies from antagonists into allies. Eventually, he found a taker: Andrew Lack, the former television executive whom Sony Corp. brought in to lead its music division.

“Andy Lack looked at this problem with a fresh pair of eyes,” said Thomas Hesse, president of global digital business for Sony BMG. “He looked at it without emotion. He looked for a solution.... And Wayne seemed to be a solution.”

So now Rosso has come full circle, in a sense.

Mashboxx is what many label executives have pined for: a program that lets people dip into the vast pool of bootlegs online to sample songs but not make free copies of them. In particular, it uses song-recognition technology to block unauthorized downloads, a technique that the labels want all file-sharing companies to adopt.

“His leadership is significant,” said Chief Executive Mitch Bainwol of the Recording Industry Assn. of America, a group that has been the target of many of Rosso’s jibes. “He’s made this kind of critical leap, and that is to say we in the P2P space ought to find a way to compensate the property owner.”

Mashboxx, based in Rosso’s home city of Virginia Beach, Va., has not struck deals yet with all the major music companies, nor does it have a firm date for launching its software. And there is no telling whether it can lure users from Grokster, Kazaa and other file-sharing programs that let users amass huge collections of digital music and movies for free.

“Whether it can survive economically is just totally up in the air,” said Lawrence Kenswil, a top online music executive at Vivendi Universal’s Universal Music Group. “Nobody knows.”

Another important variable is the Supreme Court’s pending ruling on the lawsuit by major music and movie companies against Grokster and StreamCast Networks Inc., another file-sharing company. If the court rules that Grokster is not liable for its users’ piracy, some observers say, Mashboxx could find it even harder to build an audience.

That’s because many people are likely to misinterpret such a ruling, thinking it would mean that downloading copyrighted works was legal too. And Mashboxx is counting on the specter of liability to motivate people to switch to its software.

Still, the major labels and other entertainment industry heavyweights have to make peace somehow with the estimated 60 million people using file-sharing networks in the United States. And after six years of relentless legal and technological attacks by the entertainment industry, many executives in the file-sharing business say they are eager to become partners rather than pariahs.

Those forces have led a growing number of companies to try to marry file sharing and commerce. They all face stiff competition, not only from the many sources of illegal downloads online, but also from established legal outlets such as Apple Computer Inc.’s iTunes Music Store.

Rosso “has been, for better or worse, in the middle of many of the major peer-to-peer controversies, I think always with an eye toward making a business out of it,” said Larry Miller, chief executive of Or Music, an independent label in New York. “And if he’s able to do that with Mashboxx, all the credit to him.”

Thick around the waist and a little shorter than average, Rosso has both the drive and the figure of a bulldog, although he prefers to describe himself as a sweet Italian sausage. He has been married and divorced twice and says he has two Italian greyhounds in lieu of having a third wife or children.

Rosso, born and raised in the Virginia Tidewater region, graduated from the University of South Carolina in 1970 with a bachelor’s degree in English. He promoted rock concerts in Atlanta and filled retailers’ orders for records and tapes in Los Angeles before gravitating to music industry PR.

Later, in New York, Rosso proved particularly skilled at getting his clients mentioned in the tabloid gossip columns.

“He had very good contacts at the columns, so if you had a party or an event and you wanted it mentioned, he could get it mentioned,” said Paula Batson, a longtime music industry executive. “He was also passionate about the artists he was representing. He was very tenacious.”

Rosso’s route to Mashboxx started in the mid-1990s, when he joined a start-up independent music company in New York. While the company was just getting off the ground, Rosso said, it bought a fledgling online music company called SonicNet.

“Nobody knew what it was, what it was good for, but at the time it was the No. 1 music destination on the Web, for whatever that meant,” he said.

After a couple more mergers, Rosso was unemployed again, and he ended up working for a series of ill-fated companies that were trying to transform the music industry with digital technologies -- including one, CantaMetrix, whose song-recognition technology helped weed bootlegged files out of file-sharing networks. Then, in September 2002, Rosso went to work for Grokster founder Daniel Rung of Palm Springs.

“Long story short, the owner of Grokster was looking for someone to run the company and to sort of front it, and I got friendly with him,” Rosso said. “He was a very nice guy, and he asked me to do it. So I did it.”

Grokster had already been sued by the major record companies, music publishers and Hollywood studios, which accused the company of contributing to and profiting from piracy. Rosso and Rung said that one of Rosso’s main duties was to try to make peace with the copyright owners and obtain licenses to distribute their wares online.

“We agreed that this just couldn’t go on forever,” Rosso said of the unauthorized downloading. “These people have to be paid for their content. It was just a question of how and how much.”

Rosso said he tried to woo executives at four of the major record companies -- Universal, Warner Music Group, BMG and EMI.

“Nobody really wanted to talk to us,” he said. “They all felt that they were going to win this lawsuit. And the prevailing attitude was, ‘We’re not going to reward pirates.’ ”

Ted Cohen, senior vice president of digital development and distribution at EMI, remembers things differently.

“We’ve always been willing to sit down and talk about legal alternatives,” Cohen said. What was missing in those days, he said, was a good business plan for an authorized file-sharing service.

Rosso spent most of his time defending file sharing against the entertainment industry’s attacks, including accusations that it promoted child pornography and identity theft. He blasted the industry for refusing to cut deals with the file-sharing networks, and he called on Congress to force copyright holders to license their works to Grokster and its ilk. And he denounced the labels’ efforts to force song-recognition technology onto the file-sharing business, saying such things as, “We cannot filter.”

Where Rung was so averse to publicity that he used a pseudonym in news releases, Rosso relished the spotlight. He mixed a we-will-bury-you brashness with self-deprecating humor, slamming himself and his foes while insisting that it was nothing personal.

He shot poison-tipped verbal arrows at the music industry and the major labels’ trade group, the Recording Industry Assn. of America, from a bottomless quiver and soon was a fixture in the press and at industry conferences.

For example, in an interview on CNBC two years ago, Rosso said, “The music companies are living in the 20th century. They’re out of their minds, and they’re going to go down in flames if they don’t get with the program fast.”

He was glib too, someone who always sounded like he was looking for angles to play. When CBS News’ Lesley Stahl asked Rosso in 2003 whether he would sell Grokster to a movie studio, he replied, “Sure. Call me.”

“It was all marketing,” Rosso said. “We realized that every time Grokster was mentioned in the media, good or bad, downloads would shoot up, would spike. And, ergo, more users.”

And the more users Grokster attracted, the more money it made. Like other peer-to-peer programs, Grokster enabled people to copy files from one another’s computers for free. Its revenue came mainly from two sources: advertisers whose messages popped up on the computer screens of Grokster users, and software companies that paid to have their programs bundled with the Grokster software.

“What was the RIAA going to do? Sue us again? We were already being sued. And they were kind enough to keep delivering up PR softballs the size of grapefruits. A blind man could have hit them out of the ballpark.”

Actually, the labels did sue Rosso and Rung again. The pair were involved in Puretunes, a short-lived downloadable music store that sold songs in bulk at a deep discount. The labels claimed that the Madrid-based store was unlicensed and infringing, and Rosso, Rung and other principals agreed in October to pay them $500,000 to settle the case.

Rosso left Grokster in mid2003 to join Optisoft, which was founded by a youthful Spanish software developer named Pablo Soto. Rosso’s idea, he said, was to pitch a new, more controlled type of file-sharing network to major recording artists as a way to distribute music to their fans.

“I wrote Pablo a memo at the time saying that the peer-to-peer business was just a dead-end street the way it was, and that it just couldn’t go on. No matter what I was saying in public, I knew in my heart of hearts that there was no way that a P2P was going to keep going on like it was.”

Rosso also had started courting Andrew Lack, who had taken over at Sony Music in January 2003. Early the next year, Rosso said, Lack floated an idea for authorized file sharing while the two were chatting in Lack’s Madison Avenue office.

“He said, ‘I want to start a sampling service. I need somebody to, you know, to work with me on it.’ ”

Rosso went back to Soto, who had previously agreed to work with Sony, then changed his mind. So Rosso told Lack that he would come up with the technology himself. He left Optisoft and started rounding up investors to fund the company and engineers to build its software.

A key piece of technology is coming from Snocap Inc., a San Francisco-based company led by Shawn Fanning and Ali Aydar, two veterans of the pioneering Napster file-sharing service. When a Mashboxx user tries to download a hit song from someone on one of the major filesharing networks, Snocap’s song-recognition software will intervene and deliver an authorized, copy-protected version.

Mashboxx is still negotiating with labels and music publishers over what its users will be able to download for free -- for example, songs that are altered with brief voice-overs. In most cases, a permanent, high-quality copy that can be burned to a CD will carry the same charge it does at a typical downloadable-music store.

Kenswil of Universal Music Group said Mashboxx would fall short of the music industry’s “holy grail,” which would be converting an established file-sharing program that already has millions of users. One leading file-sharing company, iMesh, is trying to do just that, although it has been delayed by technical difficulties.

One of Rosso’s goals is to persuade other file-sharing networks to run their own branded versions of Mashboxx. Rung of Grokster declined to comment on any deals he may have in the works but said, “We think something similar to that, maybe not quite the same specific details, might be very interesting to Grokster.”

Rosso said that he was skeptical about Lack’s idea initially but that he now liked Mashboxx’s chances.

“The day we open, we’ll be the largest source of authorized music in the world,” said Rosso, ever the pitchman.

This is the same kind of buzz-building he used to do for clients such as Harry Connick Jr. and Crosby, Stills & Nash. It’s something he’s adept at, even if he’s not exactly nostalgic for his days as a publicist.

“I knew the day that David Crosby almost vomited on me that my days as a press agent were numbered,” Rosso said of a particularly memorable incident from 1984. “Some people would say it’s a shame that he missed.”