Today's Business News / YellowBrix
Napster returns, with music industry's blessing
Charleston Gazette, The
LOS ANGELES - Napster may be long dead, but the name and the "kitty" logo of the pioneer online music-swapping program could return to cyberspace before the year is out.
Santa Clara-based Roxio Inc., which owns the rights to the Napster name, plans to shelve its current online music service, pressplay, and roll out Napster 2.0 by Christmas, Chris Gorog, Roxio's chairman and chief executive, told The Associated Press.
Gorog was scheduled to announce details of the venture today at the Jupiter Plug.IN Conference & Expo in New York.
Software maker Roxio acquired pressplay, a joint venture of Universal Music Group and Sony Music Entertainment, in May, six months after it bought the rights to Napster for about $5 million. The company hopes to generate interest and sales off what is arguably the most recognizable brand name in online music.
"Napster 2.0 has really been designed with a deep respect for the characteristics that made the original Napster so successful," Gorog said. "Consumer choice is really the biggest value that we have been able to carry over."
The new service may carry the Napster name, but it will have little else in common with the original, which provided a means for users to download music free of charge before it was forced to shut down in 2001 after losing court battles with the music industry.
Unlike its predecessor, Napster 2.0 will have the blessing of the five major record companies and many independent labels. But users will have to pay to download music files, and some of the song files will have restrictions on a variety of usage rights, such as how many times they can be burned onto CDs or moved to a portable digital music player.
Unlike pressplay and other PC-based online music retailers, which offer either a la carte music downloads or require users to pay a monthly subscription fee, Napster 2.0 will offer the option of doing both.
"This, we think, is the most significant change with what's currently out there," Gorog said.
Gorog declined to specify how much songs would cost, but said prices would not be out of line with what other online music services charge. The lowest price available now for downloading a single song at other online music retailers is 79 cents. Some services charge over a dollar to download some songs, while full album downloads can be found at under $8.
Gorog also declined to give details on what usage rights customers will have to songs downloaded from Napster 2.0.
"We're working with the labels to liberalize usage rules and we believe that they will be much more liberal than we have had in the past," Gorog said.
Restrictions on what consumers can do with music they pay to download remain an obstacle for PC-based online retailers. Only Apple Computer Inc.'s iTunes Music Store, which debuted in April, has so far enjoyed usage deals with the record labels that give its customers freedom to burn the songs they buy to CDs virtually without restriction.
Napster 2.0, however, will try to eclipse all other digital music retailers by debuting with a selection of about 500,000 tracks. The current song volume leaders, pressplay and BuyMusic .com, which opened for business last week, each say they currently offer more than 300,000 songs.
The service will also have Internet radio, exclusive programming and artist interviews, Gorog said.
Nostalgia over Napster will likely drive interest in the new service, but that may not be enough for Roxio if the service doesn't deliver, said Phil Leigh, an analyst with Raymond James & Associates.
Leigh believes Apple's service, with its liberal usage rules, will likely be the standard to which consumers will hold the new Napster.
"If they do something short of that, then they run the risk of damaging the value of the brand," he said.