The Fourth Napster Item

Feb 7 04:53 UTC 2001

Thomas Middelhoff, the CEO of the media conglomerate Bertelmann, picked a 
very public platform to deliver the news about Napster.  At the 
World Economic Forum in Davos, Switzerland, Middelhoff announced that 
Napster would begin charging its users by July.  Middelhoff further 
announced that a digital rights management system would become part
of the Napster experience.

The Napster corporation seemed somewhat confused by this announcement,
and at first I chalked it up a clueless executive sounding off 
on the world stage.  I didn't see how digital rights management was
going to be incorporated into the Napster file sharing model; maybe 
there was some idea that they would put some sort of wrapper around the 
MP3 file as it was delivered to your computer?

Then it struck me: first, Bertelsmann thinks that the $50 million
it loaned Napster last fall gives it control.  Second, Bertelsmann 
wants Napster's brand name and its 30-50 million users, but 
file sharing does not figure into Bertelsmann's plans.  
Bertelsmann's Napster will give users songs from central 
servers, not from everybody's hard disks.  

Essentially, Bertelsmann wants to take their failed BMG music 
download system, spiff it up a bit, and call it Napster.
I'm skeptical that this will go very far with the existing 
Napster user base.

I found confirmation of Bertelsmann's view in a recent issue 
of "Entertainment Weekly," in an article on the availability of 
racist hate songs through Napster.  In that article, Bertelsmann 
senior VP Frank Sarfeld talks about "in the future, when 
Bertelsmann and Napster, in a new musiness model, will limit 
distribution to 'licensed music from major record labels.'"

((No indie labels on Napster?  Hmm, I wonder if there's grounds for 
antitrust action here.))

Bertelsmann hasn't gotten any of the other major labels to sign up 
for a Bertelsmann-controlled Napster.