Listening post: StreamCast Networks CEO Michael Weiss lives on the cutting edge of controversial peer-to-peer networking technology currently being scrutinized by Congress

San Fernando Valley Business Journal, Oct 25, 2004 by Slav Kandyba

NOT all the innovation in controversial peer-to-peer networking technology may be coming out of the Silicon Valley.

Some of it is coming out of the French Quarter-style office complex along a stretch of Ventura Boulevard in Woodland Hills. There, StreamCast Networks Inc. is creating technology that may one day empower computer users who are swapping song and movie files across P2P networks. Think what Google did to search for music and film.

StreamCast, which was founded seven years ago, is headed by chief executive Michael Weiss. Weiss has been at the head of the company since April 2003--his second stint there after being forced out by the company's founder in 2001 (who was subsequently fired by the company's board, Weiss says).

A former disc jockey in his hometown of Chicago and an intern for Columbia Records in Miami during college, Weiss relocated StreamCast from Nashville, Tenn. to Woodland Hills last year, and, went about shaping its business model.

In his first stint as executive, Weiss was behind Morpheus, a technology which lost the battle to Kazaa several years ago as the dominant P2P network.

It lost, Weiss says, because it went "black" for a few days in 2001, and users switched to Kazaa. While Morpheus hasn't been able to regain the market, it's trying a different approach. Working with a consortium of Harvard computer science alumni, Weiss hopes StreamCast can make a name for itself by improving P2P technology in general. The Neo Network, StreamCast's newest feature, was introduced at the Web 2.0 conference in San Francisco several weeks ago.

But as NeoNetwork and Morpheus 4.5 (the latest version of that software) are tools to attract more business for StreamCast, the entertainment industry's vehement opposition to P2P technology as a whole may slow down its growth throughout the U.S.

Having lost several court battles, include the Ninth Circuit Court of Appeals ruling earlier this year that P2P companies cannot be liable for illegal copyright infringements of their users, the powerful industry, has turned to Congress. Legislators have introduced a number of bills and have let the lobbyists. For both sides duke it out in several conferences held in Washington, D.C., but they are unlikely to pass legislation as they get closer to the presidential election and a lame duck session that may ensue.

But Weiss is confident his company and P2P will weather the storm.

Question: Having created the business model for Morpheus out of thin air, seemingly, did you ever think the entertainment industry would oppose it as staunchly as it is doing now?

Answer: We thought hard before launching Morpheus, knowing that if we were successful that the entertainment industry would come after us with all their might and fury. We weighed the options of moving offshore or staying in the U.S.

In the end, we decided to launch Morpheus and stay in the U.S. because of our strong belief that what we were doing was legally right (as proven out in our court cases) and that we had a moral right to do so.

We weren't going to let the entertainment industry stifle innovation as they have tried to do for the past century--ranging from piano rolls, TV, radio, home video and now P2P.

Q: You have a background as a DJ, college training in mass communications and interest in developing technologies. There are numerous technologies to get involved in--how did you end up in such a controversial one ns P2P?

A: (After several stints in other businesses) I said I've got to get involved with streaming media as soon as I can ... because this is the future. There were only three companies doing streaming video (then): Microsoft, RealNetworks and a company out of Tel Aviv, GEO Interactive Media.

GEO had just opened an American office in Woodland Hills. The president of the U.S operation knew my work at a previous company--so he hired me almost on the spot.

GEO was introducing a new streaming media tcctmology called "Emblaze" in 1998. I became vice president of strategic development and put in charge of creating a business plan to introduce the technology to the public. I figured out what we needed was a business example of this technology that could also be in business on its own.

Q: So how receptive were they?

A: I submitted my 300-page business plan to my boss here and Israel and I got a call back from Tel Aviv that was critical of my plan. The very next day Mark Cuban's broadcast.com went public and at the time was the largest public offering on NASDAQ. It was the same business model.

Q: So you got called back, of course?

A: I got a call back and flew back to Tel Aviv. After six months, the board of GEO agreed to fund my idea with a half-million dollars and I hired a team of 16 people one them is actually still here--and launched webradio.com in January 1999.

GEO was traded on the London Stock Exchange with a market cap of $330 million. Six months after the spin-off subsidiary Webradio.com (was founded), Wall Street gave it a valuation of $440 million--$100 million more than the parent company.