SNOCAP: Digital Direct

SNOCAP has positioned itself as an independent online clearinghouse for all artists, both the unsigned songwriter with only three songs to his credit or a multi-platinum recording artist with an armful of Grammys.

SNOCAP has positioned itself as an independent online clearinghouse for all artists, both the unsigned songwriter with only three songs to his credit or a multi-platinum recording artist with an armful of Grammys.

In June 1999, a peer-to-peer file sharing service named for the unhygienic appearance of one of its co-founders’ hair was launched from a college dorm room in Boston and ultimately turned the music industry on its head.

At its height, more than 26 million people utilized Napster to share music, both legally and illegally. Entire albums routinely made their way onto the service’s network prior to their release dates, and users frequently downloaded music without paying any royalties to copyright holders. Two years after its launch, Napster executives shut down their networks and subsequently filed for Chapter 11 bankruptcy following copyright infringement lawsuits from the Recording Industry Association of America and artists including Metallica and Dr. Dre.

Alex Rofman, who led the compliance and media operations department at Napster, says company co-founder Shawn Fanning learned many lessons from both the rise and fall of the iconic yet controversial file-sharing service. He moved on to his next venture in 2002, founding SNOCAP, a San Francisco-based digital licensing and copyright management services provider.

“One could argue that Napster would not have grown at the rate that it did if it had gone down the path of seeking licenses from content owners and rights holders in the beginning,” Rofman explains. “But history shows that you need to have permission from the content owner to build a successful business in this space. From the first day of SNOCAP’s existence, we’ve done everything with permission from the rights owner.”

To hear Rofman preach the virtues of content licensing might come off a bit duplicitous given his past employment at Napster, but the current vice president of corporate and business development at SNOCAP believes the landscape of the music industry has changed drastically over the last decade.

“Digital distribution of music and other forms of media is a reality now,” Rofman says. “Everybody in the industry understands that it’s the future, whether it’s three, five or tens of years down the line. The physical act of going to a record store and purchasing music will likely go away. Digital will be driving the music business in the future. Back in 1999, the forward thinkers probably understood that but couldn’t see a path for getting there, because there were no established models or technologies yet. All of that has changed in the last eight to 10 years. Today, content rights holders are starting to better understand the options they have and the different paths they can take to assure compensation for their content.”

Through SNOCAP’s Digital Registry, artists and labels can upload their content electronically and sell their music through digital retailers or through their own personal online store. Because the registry is open to all rights holders-regardless of the size of their catalog-SNOCAP has positioned itself as an independent online clearinghouse for all artists, both the unsigned songwriter with only three songs to his credit or a multi-platinum recording artist with an armful of Grammys.

“That inclusiveness actually grew out of one of the lessons from the Napster days,” Rofman says. “Napster proved that there are people out there who want content from unsigned artists or smaller independent artists…as well as mainstream pop artists. From day one, we’ve always felt that the most core element to any successful digital music service was enabling people to find what they’re looking for, whatever that may be. So we decided not to shut ourselves off to anyone. We want to enable any artist, big or small, to have distribution on par with the biggest names in the business.”

The company has inked deals with EMI, Warner Music Group/ADA (Alternative Distribution Alliance), Universal/Fontana and is currently in discussions with Sony BMG and several other major labels. While SNOCAP is already working with labels outside the U.S., Rofman says the company is currently in discussions to expand its international presence so it can offer its services to independent artists around the world. But the company’s biggest coup may have come in September 2006, when it formed a partnership with MySpace.com to become the exclusive provider of digital music retail tools to the social networking megasite’s more than 100 million users.

“Our partnership with MySpace is important to us because MySpace provides a home for all artists, whether you’re a huge name or a no name. You can make a home for yourself on MySpace and market yourself and make your content available to your fans. With SNOCAP’s ‘MyStore’ platform, our clients can offer music online for purchase directly to their fans and other consumers with a couple clicks of a mouse…in the environment in which an entire generation of people are experiencing the music they love. It’s not on the radio anymore. It’s on the Internet and sites like MySpace. That’s where people are experiencing music.”