09/29 - Valley’s Limelight Networks is poised to be a key player in legal distribution of music on the Web - East Valley Tribune: Business

09/29 - Valley’s Limelight Networks is poised to be a key player in legal distribution of music on the Web

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Posted: Monday, September 29, 2003 9:47 am | Updated: 2:11 pm, Thu Oct 6, 2011.

Limelight Networks isn’t living up to its name, so far.

The company operates a digital network used by music companies to distribute songs legally over the Internet.

That means a lot of people use the company’s technology to download songs, but most don’t know it.

"You’ve heard us, but you haven’t heard of us," said William Rinehart, president and chief executive.

But the company may be more in the spotlight as the music industry tries to figure out how to encourage consumers to buy their products legally.

In the latest skirmish between the industry and music listeners, the Recording Industry Association of America has filed hundreds of lawsuits against computer users who shared music files over the Internet. By offering a low-cost way to download songs legally, Limelight could play significant role in helping the music industry deal with piracy.

"We help media companies monetize their content," is how Rinehart describes the mission of his company, which operates its network center at 2220 W. 14th St., Tempe. The company is in the process of moving its headquarters from Phoenix to the Tempe site, bringing all 30 of the company’s employees to the East Valley.

Limelight provides the electronic storage capacity for hundreds of thousands of songs and the digital network to distribute music and radio webcasts via the Internet for numerous entertainment companies such as BuyMusic.com, Musicmatch, Wind-up Records, RadioFree Virgin, Jimmy Buffett’s Radio Margaritaville, radioio and QuePasa.com.

The company also has developed software that allows a personal computer user to download multiple songs with just one click. Limelight has a patent pending on the process.

Although illegal sharing of music files probably will never be completely eliminated, Limelight executives believe that making legal downloads cheaper and easier could curb the popular practice.

"The future success of both the recording industry and Internet music industry requires a shared commitment to enhancing legal downloading opportunities," said David Rice, Limelight’s vice president of marketing and channel development.

The company also has technology to deliver movies across the Internet, preparing for what may become a popular means of movie distribution.

Rinehart said the company also is working with the Phoenix Coyotes hockey team to send streaming video of postgame player and coach interviews to fans viewing the Coyotes’ Web site (www.phoenixcoyotes.com).

Timing has been the secret of success for Limelight. The company was founded in 2001 by Rinehart and two other entrepreneurs, Nathan Raciborski and Allan Kaplan, who all earned fortunes by developing and selling an Internet service provider in the late 1990s before the dot-com bust. They decided to reinvest in the entertainment distribution business because "we understand the distribution of content, and we knew the music companies wouldn’t let college kids steal their music forever," Rinehart said.

The privately held company also was able to acquire network equipment cheaply from another firm that changed its business model when the slump hit.

Limelight is generating positive net income, and Rinehart plans to invest more to expand the business. Eventually Limelight could be a tempting acquisition candidate for a major telecom company once that sector recovers, he said.

"For the rest of this year and through 2004 we will grow the company," he said. "In 2005 we will take a look at our options."

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