Revised Napster puts pay version in place

Still on the ropes after a legal pummeling from the record industry, Napster will nevertheless have a pay version of its once wildly popular file-sharing service ready this year, according to Thomas Middelhoff, chief exec of media conglom and Napster-backer Bertelsmann.

Speaking at a media conference in Potsdam, Germany, Middelhoff said the technology to power Napster’s new subscription-based service was in place, according to a Reuters report. His comments echo those made at a technology conference in Colorado last week by newly installed Napster prexy Konrad Hilbers.

Dancing around dates

At the beginning of the year, Middelhoff had claimed that the service would be up by June or July; later, Napster execs said it would be ready to launch by the end of summer. Several industry insiders have questioned whether the company’s technological infrastructure would be prepared in time.

Napster’s original free service has been on life support since an injunction handed down in February by the U.S. District Court in San Francisco, with time spent on the network by American users down 70%, according to a recent Jupiter Media Metrix study.

The original service, which once boasted more than 60 million loyal users, shut down in July to update its filtering databases.

Coin infusion

Last October, Middelhoff and Bertelsmann’s e-Commerce Group struck a deal with Napster, lending the file-swapper $50 million to finance the development of the revised service, which the partners promised would compensate artists, labels and publishers.

If and when the new offering goes live, it will join a crowded field of new music contenders. Two groups of media companies have each backed separate digital distribution schemes: AOL Time Warner, Bertelsmann, EMI, Zomba and media software maker RealNetworks have backed MusicNet, while Vivendi Universal and Sony are behind Pressplay. Also in the mix are independent distribution companies, including FullAudio and Uplister.

Meanwhile, Napster has inked licensing deals with MusicNet and a consortium of independent labels in the U.K. and Europe to clear music for the new service. Pricing will be in the neighborhood of $5 per month, according to recent comments by Hilbers.

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