Fall of the House of Napster
p2pnet.net News:- Ever since Roxio did a Frankenstein on Napster, killed by the Big Music record label cartel, now and then it reappears, zombie-like. And every time that happens, the lamestream press greets it like a second coming.
However, even with these massive infusions of free publicity somehow, Napster never even gets close to becoming established. In fact, as the Chicago Tribune’s Leon Lazaroff states it, Napster Inc, the file-sharing company with the groovy name and a checkered past, may be legitimate now, but that’s no guarantee of long-term success.
The company has been burning through a lot of cash, though it expects to be profitable in a couple of years. Of course, a bunch of Internet-based companies said the same thing, and they went bankrupt. They had no underlying business, and all the venture capital in the world wasn’t going to save a financial phantom.
Napster`s latest effort, a rent-a-track subscription deal under which people are expected to pay a monthly fee for music which vanishes as soon as they stop paying, is languishing. Just like everything else Napster-ex-Roxio has tried.
But Net media analyst Kit Spring believes “subscription music is going to explode – it’s a great product, says the story.
And, “It’s a mind-share factor,” it has another analyst, Barbara Coffey, saying. “People think file sharing and they know Napster is legitimate.”
But, unlike a few years ago, Napster faces some formidable competitors, including Yahoo’s Musicmatch, RealNetworks, and Apple’s iTunes, the reigning king of the hill, says the Tribune.
When it releases fiscal first-quarter results Wednesday, it`s expected to have added only 25,000 subscribers, a sharp deceleration from the 86,000 full-paying ones added in the fourth quarter, says the story, going on, Then there’s the issue of cash.
Spring expects first-quarter revenues to total $20 million. But nearly $16 million of that goes directly to the record companies as royalties – the cost of being legitimate. All told, Napster is likely to have burned through $27 million, $20 million of that for marketing. With $132 million in cash at the end of March, and going through about $27 million a quarter, Napster has roughly until late 2006 to significantly improve its operating margins or risk imploding.
Coffey urges patience but, with iTunes accounting for 7 out of every 10 songs downloaded, according to Nielsen SoundScan, the Tribune says a third analyst, Steven Frankel, is far less sanguine.
“You have to be powerful enough to get through this competitive landscape and attract customers profitably,” the Chicago Tribune has Frankel, who rates Napster a “reduce,” one step above “sell,” saying.
“At the moment I don’t have high confidence in them being able to do that.
In short, as we’ve been saying since the day Napster was resurrected, let it rest in peace.
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See:-
Chicago Tribune – Napster waits for business to boom, July 30, 2005
July 31st, 2005 at 6:18 pm
good carmic payback I say.
How dare they foist their fees on college students at penn state.
July 31st, 2005 at 8:07 pm
The house of cards are falling. Just hoping the ‘mother of all house of cards’ – the RIAA / MPAA — will coming crashing down very soon…
July 31st, 2005 at 8:18 pm
not just Penn
July 31st, 2005 at 8:27 pm
I have heard from folks without a clue on how Napster is the greatest thing since sliced bread. I wonder how they will feel when Napster closes their doors and verifying connections can’t happen anymore. At that point the music is dead on the drive and they will find out exactly what they purchased. Unusable 1s and 0s that have no value whatever. What amazes me is they paid good money for that sort of DRM.
July 31st, 2005 at 9:47 pm
“It’s a mind-share factor,” it has another analyst, Barbara Coffey, saying.
Uhhuh? A mind-share factor… what does that actually MEAN (apart from being another corporate buzzword)?
July 31st, 2005 at 10:35 pm
This is one of your better and well balanced articles even if the source material, as usual, came from elsewhere.
Keep up the objectivity Releagate the mission.
July 31st, 2005 at 11:11 pm
Should be called “Crapster.” Or, since it’s in the vile grip of the duel headed Hydra (RIAA/MPAA) they should’ve called it “Gangster” or “Fraudster.” RIAA, may you soon be DOA.
August 1st, 2005 at 12:24 am
this is more mind fuk than mind share
August 1st, 2005 at 2:28 am
How can P2P even costing 1cent an album compete alongside, on an even playing field with unauthorised downloads costing zero cents. Honour amongst thieves. Historically revolutions replace one tyrant with another. Most of you sound altruistic others rebellious and a few would be rock stars from the last three decades. The facts remain, it does not matter how thin you slice it, theft is theft. And yes record copanies are self interested, their big beef is losing sales of their property to illegal stolen and unauthorised downloads. P2P has been intentionally developed for various reasons to deliberately avoid control and responsibility, while their intent is crystal clear.If they invest and produce, recruit, create, entertainment then by the rules of our capitalist materialistic based societies, they can charge a price in exchange of that product. If you don’t like their product you don’t have to buy it, but they are not going to simply allow you to steal it. If P2P networks where to truly legitimately produce new stars they would have to promote and develop them just like record companies do now, otherwise they would get lost in the huge ocean of other digital buskers (which is what their model basically is). No one said life was going to be fair. If all of the worlds money was evenly distributed amongst all humans, within 10 years it would have a similar distribution as it does today. There is no way that petrol prices can be justified, but you can’t download petrol. In the same period that world CD sales have delined 20%, dog food sales have increased by 20%. But you can’t download dogfood. Dogs in western countries eat better than most children in Africa. If a junior school lunch shop stocked 99% candy do you think kids would be induced to pigout, a bit hard to say no. Would you like the windows taken out of the shops to so you can help yourself. If you could get away with anything what would you do. Have you examined your values,are you honest about your motives, what do you stand for. If the one underlying truth of life was that everything returns to the sender/creator, would change your behavior.
August 1st, 2005 at 3:37 am
You presume much but understand little.
P2p is of poor quality, it isn’t top notch. Nor are the formats being sold on line of top notch either. They are wanting to charge the same thing for substandard product. (Incidently it don’t care for the product but that is neither here nor there.) In order to compete and yes it can be done, there must be a reason that is worth the money to encourage folks to pay. The low quality of p2p allows a large area for doing so. The present attitude of the cartels isn’t to improve the product but rather to lock it up. I have no issue with that lockup. They can put it in a sealed vault for all I care. I will NOT PAY for locked up content at low fare with no ablility to do with it what I wish, be that cassette tape or cd to play in the car. I WILL NOT buy some extra equipment to satisfy the cartels wish to play locked up content. My present player works just fine. In fact there have already been cases against the cartel for these locked up schemes that prevent the player from actually playing the legally purchased cds sold. If that isn’t enough, Sony has told several of the other cartel members they may not display the cd emblem on the case of these damaged cds as they do not meet the redbook standards. In fact, if you wish to play them on your computer it stands a very good likelyhood of damaging the player.
Movies? The same way. New lock up schemes carry codes for revocation of the player. Meaning if your player number is on the list, you put in one of these dvds, your player will cease to function. They didn’t buy the player. The player is of far more value than the disc. I will NOT purchase, NOR will I particpate in this sort of forced consumerism that thinks it is ok to damage equipment that doesn’t belong to them.
NOR do I agree with these EULAs that are so much trash. Making claims that for the most part aren’t enforcable.
I would rather see the music cartels doors, locked, shuttered, and burned to the ground in hopes that the rebirth might have some sort of thought for the customer as a customer rather than a consumer.
Now that would change my behavior!!!
August 1st, 2005 at 5:20 am
“The facts remain, it does not matter how thin you slice it, theft is theft.”
For the last time… Copyright infringement is not theft!
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RIAA is Full of Bunk, So is New York Times
By Bill Glahn
On September 12, 2003, the New York Times defended the Recording Industry Association of America’s recent lawsuits against P2P music file-sharers [Suing Music Downloaders]. The editorial was based on a number of flawed concepts, which just goes to show that if the RIAA states something loudly enough and often enough, even the New York Times will accept it as fact. I thought the New York Times was trying to do a little more fact checking these days before printing stories out of school.
Although many important ideological arguments have been made regarding the morality or immorality of file-sharing, I will limit my points here strictly to the confines of the capitalistic system that we exist in and established legal principals. The New York Times calls suing file-sharers the RIAA’s best legal strategy. The problem is this strategy doesn’t even hold up in those arenas.
The first and most alarming position that has been propagated by the RIAA and apparently accepted by the New York Times is the one that “stealing is stealing, online or in a store.” In fact, and in law, this is clearly not as black & white as the music industry would like us to believe.
The notion of copyright infringement as theft was clearly addressed in the 1985 Supreme Court decision of Dowling v. United States. While this case involved hard goods (phonograph records), Justice Harry Blackmun was most certainly speaking of abstract property (copyrights) when he wrote these words in his majority decision overturning Dowling’s conviction of interstate transport of stolen property: “(copyright infringement) does not easily equate with theft, conversion, or fraud… The infringer invades a statutorily defined province guaranteed to the copyright holder alone. But he does not assume physical control over copyright; nor does he wholly deprive its owner of its use.”
This decision was based on established law with a long appellate history. The Digital Millennium Copyright Act, under which the RIAA gets its policing powers, is not and is largely untested in the courts. Paul Dowling was convicted of copyright infringement (a misdemeanor at the time) but was vindicated on the more serious crime of theft.
This brings us to the point of whether or not file-sharers meet the criteria of “fair use” or are indeed guilty of copyright infringement. This is less clear. Let’s assume that they don’t meet the confines of the fair use doctrine. Is it the RIAA’s lawful right to sue them or does that right belong to someone else? File-sharers have not entered into a contract with artists and do not collect fees for the songs that are up-loaded from their computers. Therefore, they are not stealing anything. Infringing perhaps. But not stealing. But does the RIAA have the right to speak for the artist if such an offense has occurred? As Fred Wilhelms pointed out in the September 6 RIAA Watch column, there are some serious questions about the artists’ contracts with their labels and whether they include digital rights. And also about how the payments are to be made to the artists. The major labels are collecting fees from for-pay download sites such as iTunes and also through lawsuit settlements against file-sharers. RIAA Watch has already pointed out how the industry may be pocketing money that isn’t theirs. Now Cary Sherman, president of the RIAA, has stated that none of the lawsuit money will be passed on to the artists either.
These comments beg the question, “Who is really doing the stealing here?” Artist’s incomes are tangible. Copyrights are not. I’d call pocketing income that has already been collected as stealing.