Local Companies React to Napster Ruling

With yesterdays ruling on the Napster case in the books, local companies involved in the digital media and file swapping industries are speaking out.

Real Networks, who last year launched its own subscription-based digital media service, GoldPass, had a quite a bit at stake from the ruling.

“Today’s court decision is an important step in establishing clear rules of the road for digital music distribution — rules that will help make Internet bootlegging a thing of the past,” said Rob Glaser, Real’s Chairman and CEO. “As such, we think the ruling is a very positive development. Now it’s time for the industry to move forward to build great businesses that respect the legitimate interests of consumers, artists and rights holders.”

The company views this decision as an opportunity for the media industries, rather than a victory over digital distribution.

“Just as the film industry grew to embrace the VCR as a new means for distribution and a new source of revenue, the record industry is now faced with a unique opportunity to grow their businesses while giving consumers new avenues for accessing great content,” said the CEO.

Frank G. Hausmann, Chairman and CEO of Hillsboro, Oregon-based CenterSpan Communications Corporation, also feels the decision will have a generally positive effect. Hausmann’s company develops and markets peer-to-peer Internet communication and collaboration solutions.

“CenterSpan believes the process of integrating digital technologies with content distribution is just beginning. Consumers want easily accessible, high quality content, and content owners want to be assured that their rights will be protected,” saud Hausmannn. “Yesterday’s decision by the Ninth Circuit Court of Appeals to uphold the District Court’s injunction against Napster is a strong statement that the legal rights of copyright holders must be protected in the new digital distribution paradigm.”

CenterSpans new Scour Exchange program may indeed benefit from yesterday’s ruling. According to the CenterSpan CEO, Scour Exchange respects and protects copyrights and provides content owners with mechanisms to control the distribution and use of their material while profiting from it.

“We are actively talking with labels, studios and artists about using the new Scour Exchange as a subscription based, peer-to-peer digital distribution channel.”

Neither Real Networks nor CenterSpan saw large changes in their stock like eMusic and ARTISTdirect, whose prices increased yesterday 69% and 40%, respectively, as a result of the decision.

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