Cringely Tries Snapster 2.0

Fungii writes "Following up from this story last week, here is an update on Cringely's site about the snapster idea. He writes about some of the more interesting reader responses to the idea. Raises some interesting questions."

Comments

Re:Mutual ownship like in funds

[Insipid Trunculance]

Not anymore.after the US tornado season of 90-91 Llyods took a very big hit.Nowadays its a Limited liability corporation like any other.

the problem with snapster 2

[jbellis]

is the same problem mp3.com had when the riaa successfully sued them for their virtual music locker. the idea, was that mp3.com's software would scan a CD to verify you owned it, and afterwards you could listen to the songs on it anywhere, without actually having to rip or upload the mp3s yourself because mp3.com had a master copy. IIRC the courts decided this wasn't airtight enough even with random "please insert the CD again so we can verify you weren't just borrowing it from the library" checks.

if anyone tries snapster 2 they'll lose in court for the same reason...

Cannot be a mutual fund

[DeepRedux]

Snapster 2.0 seems to be an attempt to mix the my.mp3.com model with the idea of mutual funds. As Cringely acknowledges, the my.mp3.com model is not legal. His use of the mutual fund idea will also not work.

Mutual funds are regulated by the Investment Company Act of 1940. To simplify a bit, a mutual fund can only invest in securities; it cannot actually run an operating company.

First there is the problem that Snapster is not planning on buying any securities. By law, this must be a mutual funds main business. A CD is not a security.

Second, Snapster is really going to be an operating business, which a mutual fund cannot run. A rental company, like Blockbuster, cannot organize itself as a mutual fund. Even without the distribution of physical tapes, a satellite company, like DirectTV, cannot organize itself as a mutual fund. An ISP cannot organize itself as a mutual fund.

Snapster 2.0 is going to need servers, databases, system administrators, etc. This will make it an operating company, not a mutual fund.

A mutual fund run business functions to the extend needed to track shareholders and make investment decisions. Snapster's lending of CDs goes way beyond this.

Re:Already exists...

[L. VeGas]

As a matter of fact, some libraries do exactly this right now with e-text. When you "check out" an e-book (or whatever you want to call it) you get access to html'ed book available online. Nobody else can check it out while it's checked out to you.