INTERNET Napster awakens with new service

The once-popular company could lure back its many users, an analyst says.
WASHINGTON POST
Napster -- or at least a Napster-branded, for-pay version of the once popular and notorious music service -- is on its way back to consumers.
Roxio Inc., maker of compact-disk-copying software, announced Monday that it has purchased online music service Pressplay from Vivendi's Universal Music Group and Sony Music Entertainment and will base a new Napster service on it.
Roxio said that it paid $12.5 million in cash and 3.9 million shares of stock, a total worth around $39.5 million. The company paid $5 million in November for the bankrupt Napster.
Napster revolutionized and terrified the music establishment when it was launched three years ago, by giving online users a convenient and free way to share each other's music collections without paying fees to artists or recording companies. In February 2001, the 9th Circuit of the U.S. Court of Appeals ruled that Napster infringed on the rights of copyright owners; the service shut down later that year after failing to clear copyright-protected songs from its offerings.
The new Napster
The forthcoming Napster offering will be "a dramatic renovation of the Pressplay service," said Roxio chief executive Chris Gorog. "It will contain far greater choice for the consumer."
Gorog said that the new Napster will debut within the next fiscal year and will offer less restrictive CD-copying features than other music services. The company plans to spend $20 million to launch the service, which will contain offerings from all five major labels.
Current for-pay music services have so far failed to take off among consumers. Critics say that's because they have limited selection of music and they enforce strict rules on copying or transferring music files.
"It's hit or miss. Sometimes you can find what you're looking for and sometimes you can't," said Jim Burger, an attorney in Washington who has tried the Pressplay service for five months.
Burger also said he wished he could get higher-quality music files with the service. "It's expensive to burn something and it's just MP3s. If I really want to take something with me, I can't do it without spending as much as I would on a CD."
Analyst's view
Phil Leigh, digital media analyst at Raymond James & amp; Associates, predicted that Roxio could have a large amount of built-in interest among consumers simply based on the leftover strength of the Napster brand, which once boasted 13 million users before it was shut down as a result of recording industry lawsuits.
While there are a handful of other for-pay online services already online -- with names such as MusicNet, Rhapsody, FullAudio and MusicMatch -- none of those services has come close to even hitting the 100,000 user mark, said Leigh.
Michael Gartenberg, research director at Jupiter Research, said that he hopes Roxio chooses to emulate Apple Computer Inc.'s online music service by letting users download and keep music files on their own computer, as opposed to subscription services such as Pressplay that only let users access their music as long as they continue to pay a monthly fee.
Apple's online music store, introduced last month, has already established something of a high-water mark for online music services in terms of wining rave reviews from users and reviewers.
Apple's music store currently features 200,000 songs for sale at 99 cents each or $9.99 for most albums. The service sold more than 2 million tracks in its first two weeks.
Gorog at Roxio said Monday that the company has not decided whether it will favor a download or a subscription model with the Napster service.