Napster reborn as a pay-for-play service

Johannesburg, 10 Oct 2003

Napster, the free file-swapping service that changed the way music is distributed and created shockwaves throughout the established music industry, has been resurrected as a pay service.

Reuters reports that parent company Roxio, which bought the Napster assets out of bankruptcy in 2002, has introduced a test version of its new software that will sell individual songs for 99c each, albums for $9.95, or monthly "all-you-can-eat" subscriptions for $9.95.

Napster was at the forefront of the online music revolution in 1999, when it launched a service that allowed users to "share" digital music, by downloading songs from other users and making their own songs available to others.

The music industry has since heaped blame on the file-sharing services - including both Napster and Kazaa - for the sharp decline in music sales over the past few years.

In its free incarnation, Napster had 60 million users at its peak, until the five largest record companies successfully sued for copyright infringement, leading to the company closing its doors in 2001. After several attempts to re-launch as a pay service, it filed for bankruptcy in September 2002.

Following Napster`s demise, several other free sites emerged in its place, as the music industry struggled with different business models, while regarding the technology industry with a mixture of fear and contempt.

The launch of Apple`s iTunes marked a turning point for both the music and the technology industry, with the five largest music labels licensing their music to Apple on terms that were more liberal than ever before.

An associate director of research for Majestic Research has said that the market potential for online music is huge for whichever service proves to be the easiest to use and which will provide the best value, although at this point "it`s way too early in the game to say who that`s going to be".

Napster`s service is currently only available to Apple Macintosh users, who represent just 3% of the world`s PC users.

However, Roxio CEO Chris Gorog says the company will spend $20 million on marketing and ultimately expects Napster to overtake the company`s core software business as the most profitable business unit.