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Software Firm’s Chief is Out As Vidius Narrows Its Focus

Software Firm’s Chief is Out As Vidius Narrows Its Focus

Technology

by Christopher Keough

Two-year-old software developer Vidius Inc. has parted ways with its chairman and chief executive over a difference of opinion over the direction it was taking.

Derek Broes, who joined the North Hollywood company within two months of its founding in 2000, said the split was mutual, based in part on his desire to continue what he was hired to pursue.

“That comes with the territory of being with a startup,” Broes said.

Broes said he was charged with nurturing proprietary technology to track digital files among peer-to-peer networks for record industry groups and the movie studios. That work led to the development of a software product called Port Authority, which allows administrative officials in a company monitor and restrict movement of sensitive documents out of the company network.

Broes said the board was more interested in pursuing Port Authority than peer-to-peer work, in part because it was generating revenues. “We had to make a transition for the sake of the company,” he said of the change of focus to push Port Authority.

Broes said he hopes to work with Vidius on his next venture: unified standards for moving entertainment across the Internet.

Peer-to-peer networks are the next generation in Internet file swapping, allowing PC owners to transfer digital files predominantly containing music to one another without going through a clearinghouse like Napster. Because the files are swapped, not sold, the artists and their labels aren’t compensated.

The Motion Picture Association of America, concerned about the impact on the nascent digital film business, and the Recording Industry Association of America are now relying on Broes, who has resigned his posts as chairman and chief executive of Vidius and created the Distributed Computing Standards Coalition.

He said the group would operate on two fronts: develop standards for availability, reliability and security of digital distribution of copyrighted material, and then the ethics surrounding that distribution.

The goal is to eliminate the legal scrambling that occurs whenever a new threat to copyrighted material emerges on the Internet.

“We have so many peer-to-peer networks being built in the shadows,” Broes said. “(Battles) will happen if there are no standards in place because there’s no such thing as a legal network.”

Having already found himself a liaison between content owners and the Internet companies that facilitate content distribution, Broes said, “I became the centerpiece for these discussions.”

Learning Curve

Teacher training software company LessonLab Inc. got a new infusion of capital from its only outside investor with the recent second round funding from Pearson Education.

LessonLab makes software that allows educators to create professional development programs from the company’s library of training videos and then access them through the Internet. Pearson Education is a unit of Pearson Plc, the largest textbook and educational services company in the world with annual sales of $4 billion. Even after the undisclosed investment, it still holds a minority position in LessonLab, according to James Stigler, LessonLab’s chairman and chief executive.

“It’s not the money that’s significant,” Stigler said. “It’s a way to get into virtually every school district in a short period of time.”

Pearson bundles LessonLab software with its textbooks and will add an unidentified collaborative product in coming weeks, according to Stigler.

Pearson spokeswoman Wendy Spiegel said the company’s interest in LessonLab is in the ability to translate Pearson’s business from the bound world to cyberspace.

Staff reporter Christopher Keough can be reached at (323) 549-5225 ext. 235, or at

ckeough@labusinessjournal.com.

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