NEW YORK (Reuters) -- Like the phoenix from the ashes,
the once-wildly popular Napster song-swapping service is slated to
be relaunched before the end of the year, its new corporate parent
Roxio Inc. said.
Once the scourge of the music industry, Napster had at its peak in
2000 more than 60 million people using its software that allowed
Internet users to copy and share music for free, until the five
largest record companies successfully sued the company for
copyright infringement.
The record industry has long blamed such services for the decline
in record sales. After declaring bankruptcy last year, many of
Napster's assets were bought by Roxio, which makes CD-burning
software and plans to restart Napster as a legitimate pay
service.
"We're expecting to launch the service before the end of the year,"
spokeswoman Kathryn Kelly said. "But we're not relaunching until we
can establish it as a legal service."
Discussions with record labels
She added that the company was in discussions with the five largest
record labels -- Vivendi Universal's Universal Music Group; Sony
Music; AOL Time Warner Inc.'s Warner Music Group; Bertelsmann AG;
and EMI Group Plc -- to license their music. (AOL Time Warner is
CNN's parent company.)
Roxio plans to offer services that charge a fee for each individual
song as well as subscription services that allow users to download
songs for a monthly fee.
Roxio is not the first company to try to make a legitimate business
out of Napster. Bertelsmann shocked the industry in October 2000
when it said it would invest in Napster, aiming to launch a
legitimate subscription version of the service. At the time, its
BMG music arm was suing Napster.
But Napster ran out of money before it could figure out a way to
charge customers for downloads. In September, the bankruptcy court
blocked Bertelsmann's bid to buy the Napster assets. Roxio managed
to buy most of Roxio's assets, but it did not assume any of the
company's pending liabilities.
Suit filed
That did not stop music publishers from suing Bertelsmann for $17
billion last week, arguing that by throwing Napster a lifeline in
2002 it was responsible for the service continuing its illegal
infringement.
In the void left by Napster, several other free song-swapping
services have emerged such as Kazaa, which is battling the record
labels in court.
Meanwhile, commercial online music ventures like Pressplay and
MusicNet, both of which are backed by the major labels, have had a
difficult time finding their footing.