Napster: “Better and for Money”

NEW YORK — No, Napster is not dead. But yes, you can’t get anything from
the halted service right now.

That’s because Napster version 3.0 is still being worked out by the techies
at the Redwood City, Calif.-based firm. But both departing interim CEO Hank
Barry, who bore the brunt of the legal guns levied by record labels in the
last year, and incoming CEO Konrad Hilbers, said the new service will be
like the original application only “better and for money.”

Here at the Jupiter conference, the two men commandeered an afternoon keynote session concerning the
file-sharing firm’s latest maneuvers now that it has temporarily ceased to
operate. Both Barry and Hilbers said the Napster brand is here to stay and
that its new, pay-to-play subscription format, slated to launch by the end
of the summer, will feature improvements over the original product.

However, the first order of the day was to introduce Hilbers, former CEO of
CompuServe Europe and most recently an executive vice president at
Bertelsmann AG, which has invested in Napster. Barry said he had worked with
Hilbers for several months and found that he would be a “great CEO for
Napster.” Hilbers was an integral cog in helping last month’s deal between Napster and MusicNet come to fruition, which certainly
helped his familiarity with the file-swapping company.

Conversation moderator and Jupiter Media Metrix analyst Aram Sinnreich got
right to the point, asking Hilbers how he thinks he will make the transition
from a major record label to what is essentially a start-up.

“I see it as great opportunity and challenge,” Hilbers said. “I have
followed Napster and have seen projects through their entrepreneurial
phases, and I think I know how to move Napster along the track to becoming a
legitimate business. Napster cannot be killed within a short period of time.
We will bring back the service and have something to offer the people.”

Both Hilbers and Barry said their emphasis is on quality-of-service and
figuring out what will make the application easy to use for music lovers —
much like the landmark original version developed in college by creator
Shawn Fanning.

“People want to know what it is, where it is, what it does, and how can I
move it around,” said Barry, summing up the magic of peer-to-peer file

For a man who probably spent as much time in court defending his company as
he did figuring out how to make the product better in the past year, Barry
possesses a sharp sense of humor.

When Sinnreich asked the two men when they thought the new and improved
Napster service would roll out, Barry replied wryly: “Well, I’m learning a
lot about Indian summer.” Ironically, this comment suits Napster’s current
pace as much as it describes MusicNet’s and pressplay’s current schedule.

Unlike partner MusicNet, however, Hilbers and Barry said Napster would not
feature streaming music. Nor would the men, like RealNetworks Inc.’s Rob
Glaser and Universal Music representative Edgar Bronfman Jr. before them,
announce any price points for the new service.

Barry and Hilbers were just as coy in talking about the exclusivity deal
that exists between Napster and MusicNet backers BMG and EMI, which would
prevent Napster from inking deals with pressplay backers Sony Music
Entertainment and Universal Music Group. Barry would only say that Napster
could not make any direct deals with them at this point. Still, as Bronfman
Jr. alluded to in his keynote slot earlier, the possibility exists that all
of the labels may embark on cross-licensing ventures in the next year or so.
This would be ideal for the consumer — instead of having only parts of a
virtual music superstore available to them, users would be able to purchase
downloads from the entire catalog.

Hilbers said it best when he summed up the co-keynote by saying that online
music subscription services should hit the Web as soon as possible so as not
to lose the disenfranchised Napster users entirely.

“We don’t want them to disappear into nowhere land,” Hilbers said.

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