Sony, Mashboxx Reach Deal

Music giant Sony BMG finalized its deal with the legal file-sharing network Mashboxx, two days after a U.S. court dealt a blow to Mashboxx’s unauthorized rivals such as Grokster.

Mashboxx, headed by former Grokster President Wayne Rosso, is a peer-to-peer file-sharing network that requires users to pay for copyrighted songs.

The companies said Wednesday that Sony BMG songs would cost 99 cents each, in line with the price charged by Apple Computer Inc.’s iTunes online music store. Unlike iTunes, users will be able to preview entire tracks for a limited number of plays for free.

Mashboxx, based in Virginia Beach, Va., is designed to work closely with technology company Snocap, headed by Napster founder Shawn Fanning, which identifies songs by their digital “fingerprint” and determines whether they are copyrighted.

Snocap and Mashboxx got a boost this week when the U.S. Supreme Court ruled that Grokster could be held liable for copyright infringement, in part because it had taken no steps to prevent users from sharing copyrighted music and movie files.

After the Grokster ruling, Sony BMG Chief Executive Andrew Lack said he had hopes that unauthorized peer-to-peer services would change their tune by utilizing technology like Snocap’s.

“There’s an opportunity to employ lots of different technologies that legitimize these file-sharing services,” he said. “A lot of them didn’t want to come to the table until this ruling.”

Snocap has deals with all four major music labels: Vivendi’s Universal Music, Sony BMG, EMI and Warner Music. Rosso said talks were underway with the other major labels as well as a number of independents.

Sony BMG is a joint venture of Sony Corp. and Bertelsmann.