Napster officials confident of new service

Napster will be back, say company officials who recently previewed the revamped version of the much maligned, pioneering digital music site.

Napster will be back, say company officials who recently previewed the revamped version of the much maligned, pioneering digital music site. But with fees and a new file format, plus limits on which music you can download and which you can only stream to hear, you might not recognize it when it arrives.

Napster officials say they're trying to close deals with all the major music labels before they reopen for business. Cutting licensing deals will enable Napster to offer a broad selection of popular music without risking charges of copyright violations like those that have kept the company in court for most of the past two years. The company has already signed with a handful of independent record labels, including Matador Records Inc., Vitaminic SpA, TVT Records Inc., and Edel Music AG, to include their wares among the new selection.

Users will have to pay between US$5 (NZ$11.50) and $10 ($23.00) monthly for a maximum of 50 downloads, usable only for that month, say Napster representatives. But the biggest change will be the addition of a new type of file format: the .nap file, which users can download but cannot burn on CDs, and must play using a Napster client. "These files are more secure," says Paul Breton, a Napster spokesperson. Some tunes will still be available in MP3 format, Napster spokespeople say.

Napster will in turn pay the labels based on how frequently their artists' music is downloaded. The site is implementing an ID system with usage tracking to monitor downloads. Security and copyright protection have become priorities.

Singing a New Song

Music industry licenses hold the key to Napster's return, which keeps the pressure on the ongoing negotiations, notes Fred von Lohmann, a senior staff attorney at the Electronic Frontier Foundation, a technology-related civil liberties organization.

"Napster needs to come back with a deep catalogue" of music, von Lohmann adds. "But with some companies holding out against each other, that maybe a problem." On that topic, Napster officials say only they are hopeful that the site can reopen "soon."

Many observers note that the new Napster faces a challenge regaining and retaining customers who will have to pay instead of enjoying the freewheeling song-swapping system it once was. However, some also say Napster can succeed.

"In the long term, free online music is unsustainable, and users will learn to pay," says Jeff Eisenach, president of the Progress and Freedom Foundation, a technology policy-research institute.

In pay-to-play services like MusicNet, Pressplay, and the reborn Napster, "we are seeing the first editions of the future," Eisenach adds. All three of those online music services are owned or controlled by the music industry. Sony Music Entertainment Inc. and Vivendi Universal SA jointly own Pressplay; EMI Group PLC, BMG Entertainment Inc. and America Online Inc. own Musicnet; and BMG now controls Napster.

Familiarity is in Napster's favor, von Lohmann says. "Napster has a strong brand name, and people are willing to pay if you give them a value proposition," he says.

Discordant Voices

The establishment music industry isn't going to be able to buy control of the renegade online music movement, suggests Siva Vaidhyanathan, a copyright expert who is writing a book on Napster.

"No one will use MusicNet, Pressplay, or Napster because people now use other free systems like Gnutella, Morpheus, and Kazaa," Vaidhyanathan says. He also questions the music industry's claim that free online music siphons their profits, noting that fans still buy CDs, and that online music provides publicity for artists.

In fact, some artists scoff at that the music labels' claim that they oppose free online music because it hurts creativity and cuts into artists' royalties. Vocalists Don Henley and Sheryl Crow are among those who have criticized the industry for revealing the royalties they pay artists.

"The worse the music industry looks to consumers, the more people will use peer-to-peer file swapping," Vaidhyanathan says.

And ironically, the labels themselves now face suspicion that it is trying to monopolize the emerging digital music industry. Late in February, their case against Napster took a new twist when Judge Marilyn Hall Patel observed that the industry could itself be indulging in anticompetitive practices and violating its copyrights by launching MusicNet and Pressplay.

"The [Napster] judge is looking into whether the industry is pursuing anticompetitive practices," Vaidhyanathan says.

At least one analyst suggests the next notes of Napster's tune are crucial.

"The music industry, which is controlled by five major players, is at crossroads," says Matt Kleinschmit, a senior research manager at Ipsos Reid, a market research company. He says how the music giants react to the sweeping changes that technology is bringing to the industry will determine not only the shape of the industry, but also how we listen to music in the time to come.

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