| As Napster fades into the background, major record companies rev up their music subscription services 07/05/2001 By DOUG BEDELL / The Dallas Morning News
The pioneering software that made Napster an overnight Internet phenomenon is dead. New "audio fingerprinting" technology has brought about the end of unfettered file-swapping through the service. Once the advanced encryption software became operational late last week, those who remained of Napster's 70 million registered users were left scrambling to find alternatives. Log onto Napster today, and you may find fewer than 100,000 bewildered music fans sharing next to nothing. The company's new Beta 10.3 program uses an electronic snapshot of music being exchanged through its network, banning passage of any tune that is copyrighted or unrecognizable. The bellyaching was abundant online as the original file-sharing program took its last gasp. "Nap = Crap!" wrote Mike on alt.music.mp3.napster, an Internet news group. "Let's just face it, your granddaddy's Napster is long gone." wrote OakLEE, at Slashdot.com , an online news and discussion group provider. In reality, Napster's free and open music exchange didn't last long enough to develop much of a long-term habit in Grandpa, or anyone else in the family. It had only been around since May 1999. A new Napster will emerge later this summer as part of an array of subscription services being rolled out by the Big Five record companies and others to whom they've sold licenses. Consumers who want legal copies of artists' works will have to subscribe to at least two services – MusicNet and PressPlay – in order to approach the terabytes of choice that Napster once offered free of charge. Experts say other free MP3 music services such as AudioGalaxy Satellite, LimeWire.com and KaZaA.com will continue to proliferate, skirting the copyright laws that spelled doom for the original Napster incarnation. The summer of '01 may be remembered as the beginning of a profit-driven shift away from the free-loading MP3 audio format by one of the last big arrivals to the online world – Big Music. Most of the new services will use RealPlayer, Windows Media and other formats that will prohibit customers from swapping files with anyone who doesn't also subscribe. And the ability to burn those files onto CDs for play in car and home audio systems will be eliminated. Anything you download won't be easily transferred to CDs that are universally playable. "I'd say it's the arrival of the sheriff in town, but it's not going to be the end of the Wild West," says Ric Dube, analyst with the Webnoize digital entertainment research firm. "There's always going to be something that helps people get around the current system." But will we buy it? The success of Shawn Fanning's original Napster program was a product of a dismal recording industry failure. The Big Five – EMI, Warner Music, BMG, Vivendi Universal and Sony – spent more than two years in a failed effort to develop a common format to control online music delivery.
From his dorm room at Northeastern University, Mr. Fanning and his buddies crafted an easy way to share music from their CD collections. And, as the music industry watched in horror, millions of home users followed the nappy-headed programmer's lead – downloading, storing and sharing individual tracks from hard drives around the globe. Before the lawyers could put a stop to it, Napster had become a Web utility for music fans worldwide. At its February peak, an average of 1.57 million simultaneous users were logged onto Napster. More than three billion files were being traded each month, according to Webnoize. By March, a judge had ordered Napster to begin filtering its content to eliminate copyrighted content, and the record companies finally had begun serious plans to enter the online digital arena. But it wasn't until last week that the audio fingerprinting technique – the final tool needed to regulate rampant MP3 trading – could be put in place. Under pressure from lawsuits, Napster purchased audio fingerprinting technology from another company to filter out copyrighted material. That programming takes an electronic snapshot of files being offered by Napster users. Those fingerprints are then compared those to a database of known record company holdings. If they match, no sharing is allowed. The innovation was necessary to keep users from simply renaming music files, changing them to pig Latin or using other clever ways to thwart filtering, Napster officials say. "It was just a matter of time," says Mark Kindy, who leads Arthur Andersen's digital content practice. "They can't be in business to give their stuff away." With Napster finally bridled, the Big Five began frantic consolidation of their own online efforts. EMI, Warner Music and BMG coalesced behind MusicNet, which is planning to launch a subscription service later this summer. MusicNet service will be available through America Online and RealNetworks, which has developed the service's secure music encoding technology. The new incarnation of Napster will be part of MusicNet's distribution system. Vivendi Universal and Sony Music, meanwhile, have partnered to form PressPlay, which will be available through Yahoo. That service may use yet another secure system, a version of Sony's ATRAC3 encoding technology. Between PressPlay and MusicNet, consumers could get access to about 75 percent of all that had been available on the old Napster. Customers would pay between $5and $10 a month to each service. None of the planned services will offer unlimited listening, and none will offer music from all five major labels. Still, many are expected to steer clear of additional credit card charges by using one of many rogue MP3 exchanges that continue to operate. "That's the problem," says Mr. Dube. To gain subscribers, Mercer Management Consulting analyst Matthew Bender says, record companies probably will have to add other features such as rare songs or the ability to buy concert tickets in advance to any service. "The challenge for the record companies is they're going to need to create some sort of value besides just the music to get people to pay," Mr. Bender says. Beyond that, Mr. Dube says, people generally don't remember record labels. If Mariah Carey or Beatles fans subscribe to PressPlay, they're not going to get any works from either because both are under contract with EMI, a member of rival MusicNet. And then there is the problem of selling access to individual tracks, an idea fostered by the old Napster. Rather than downloading entire albums, fans had been able to pick and choose specific cuts. Many of the contracts between artists and labels currently don't permit marketing of anything other than full albums. With other licensing deals in the works, about a dozen companies are expected to start some form of download subscription service by year's end. Surveys have repeatedly told the music companies that consumers would be willing to pay for subscriptions. But many of those who have grown accustomed to the freedom of peer-to-peer music swapping may balk, especially if they can continue swapping in off-brand, unregulated mini-networks. "I do all the work; I supply all the bandwidth," says Slashdot writer GuNgA-DiN. "And then I pay Napster a fee so that others can download my files? And for some odd reason, they think we are going to go along with this plan?" Who will deliver? Behind the subscription service hubbub lurks a broader conflict developing between Microsoft and AOL Time Warner. As a partner with RealNetworks, AOL will be able to easily add subscription costs to monthly bills for its 30 million customers. Microsoft, meanwhile, has already demonstrated its ability to tightly control e-books and other digital content with its Windows Media format. The company has set up MSN Music, and may be preparing to plunge into the subscription music service with a vengeance, experts say. Conceivably, the Big Five record powers could license their catalogs to Microsoft for distribution via the Microsoft Network or a purchase service such as Centerspan's relaunched Scour Exchange, an early file-sharing service that was shut down and bankrupted by a music industry lawsuit last year. "It seems like an inevitability," says Mr. Dube. "But who the players are, nobody has said publicly yet." Today, MSN Music offers the typical fare – Internet radio, music news and music search. But it has begun beefing up its song clip library. And Webnoize is reporting that Microsoft may purchase Scour Exchange. At the same time, MP3 networks are still spinning out clones and free alternatives. MusicCity.com's Morpheus, for example, is a slick new peer-to-peer sharing network that will handle both secure music formats from RealPlayer and Windows, in addition to MP3s. Searches are zippy, and its version of file-sharing automatically resumes downloading when streams are broken off during Internet transmission disruptions. MP3 fiends are increasingly experimenting, flitting from network to network in search of their targets. Many of the new sites, like MusicCity, are built on the old Napster model. These so-called OpenNap servers run on software reverse-engineered from Mr. Fanning's original Napster code. Information-sharing technology Gnutella (gnutella.wego.com) has its own clones, including Bearshare.com and LimeWire.com (www.limewire.com). And there are new players like WinMX.com and AudioGalaxy Satellite (AudioGalaxy.com), which remembers what users are looking for and downloads it for them whenever it shows up on the network. Record companies may have to put up with that kind of free-wheeling competition, says Mr. Dube. "They can't possibly stop them all," he says. "It's a moving target. They can't sue them all, and they can't acquire them all." A new, tighter compression format that rivals the size and quality of Windows and Real formats – MP3Pro – also raises prospects that MP3 will survive, despite the best efforts of any competitors to turn their own formats into the standard, experts say. Consumers may stick with MP3 and MP3Pro simply because they will still work with any of their current audio devices. The other formats may not offer the same flexibility for years. CDs are still available, and any CD can easily be converted to either MP3 format. "The best news for the consumer is there's no hurry here," says Mr. Dube. "My advice to wait it all out and enjoy themselves." |