Making it work
The start-ups too are mixing desktop computers with central servers. Each is building software that can identify where files are located and send requests for files to the cheapest, fastest place to find them, whether this is a nearby PC or a server inside the network.
Kontiki, which was known as Zodiac Networks until late last week, is funded by the Barksdale Group, Benchmark Capital and a handful of former Netscape veterans. Andreessen is involved as a technical adviser, and the company is led by Andreessen's Netscape colleague Mike Homer. The company declined official comment for this story.
However, sources close to that company say it is readying a public launch sometime in the next several weeks. It will provide software that can be bundled with a piece of content--a song or document, for example--that will then give individual computers the ability to send that content to others who are looking for it. Users would have to give their permission, sources said.
Red Swoosh, staffed by a group of engineers who previously built one of the most high-profile peer-to-peer systems, is pursuing much the same business model. With a product that sources say will be released in a public "beta" test version by late next month, they're hard on Kontiki's heels.
"Now content companies will be able to deliver 10 times more content to users at the same cost," said one source close to the company. "You could let a million-dollar company do the same things only a billion-dollar company could do before."
Executives at Red Swoosh also declined to comment on their plans.
The trick for these companies--or their customers--will be in drawing enough people into the networks to make the ideas worthwhile. As any veteran of file-swapping knows, peer-to-peer services are best when many people are on the network, so there are many places to find a given file.
Analysts say this could be a difficult proposition.
"Somebody's paying for this somewhere," Yaffe said. "You're just offloading the (bandwidth and storage) costs to the consumer."
But the start-ups believe that media companies can persuade their customers to offer up their computers--or TV set-top boxes, in the future--in return for lower subscription rates or access to content they wouldn't get otherwise. Inside businesses, a market QuMatrix and Kontiki each are approaching, the sell may be easier.
Ultimately the question about who participates will be an economic one, the companies hope.
"Content providers are going to give better pricing points for those customers that share," predicted a source close to Red Swoosh.
