The true new Napster
Online music wars rage as rival companies compete to fill the gap left by Napster

In retrospect, it is remarkable how the Napster story prefigures the trajectory of much of the dotcom industry. Napster was the quintessential online company in that it offered something for free, leading to millions of users joining its service in a short space of time. But, like many other Internet outfits, it had no underlying business model - just some vague hope that it would be able to capitalise on its huge user base in some way, at some point.

Unfortunately for Napster, it never reached that point because of concerted legal action by the music industry, which was concerned about the enormous scale of music file swapping that Napster facilitated. The service was shut down in July this year because of "problems with the databases" used for file identification technology that was supposed to stop illegal file transfers.

A recent agreement with songwriters and music publishers only solves part of the company's problems. A full-scale deal with the recording companies is needed before Napster can restart in earnest.

Unfortunately, it seems almost certain that this will require a new kind of Napster that will be of little interest to the millions of users who supported it before. Quite what form Napster 2.0 will take is not clear, but it is interesting that Napster is an affiliate of the new Musicnet music distribution system. This is a joint venture by RealNetworks, AOL Time Warner, Bertelsmann and EMI Group. It recently had its formal launch, though technical details remain unclear (a FAQ is available).

Of course, what is most significant about Musicnet is that it has the backing of three of the top five record labels. The other two, Sony and Universal, are trying to create a rival system called Pressplay. This was announced in May 2000, but, since then, relatively little has happened.

Probably the biggest thing in its favour is the presence of MP3.com, which is owned by Vivendi, the parent company of Universal. MP3.com will be contributing most of Pressplay's infrastructure.

To confuse things further, RealNetworks has launched its RealOne service, (for more details click here). How this fits in with the Musicnet service, whose development RealNetworks is also leading, is not yet clear.

This uncertainty aside, two other major question marks hang over the online music world. One is Microsoft's plans here. Its beefed up Windows Media Player is clearly designed to position the company more strongly in this area but, so far, it has not come up with a complete end-to-end solution - probably because it is reluctant to move from technology to content, where it has been far less successful in the past.

The other joker in the online music pack is of course the peer-to-peer (P2P) sector. Napster may not have been true P2P, but it certainly popularised the idea. Since P2P is by its very nature something of an underground phenomenon, it is rather harder to track than initiatives accompanied by high-profile launches and multiple press releases.

Despite this, there is no doubt that P2P offers one important element missing from all the others: a willingness to serve users.

For all their smart technology and powerful alliances, the proposed mainstream music services are mostly about preserving the recording companies' grip on distribution. It seems likely, therefore, that the true successor to the old Napster has yet to be devised, and that the online music wars will rage a good while longer.

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This was first published in October 2001

 

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