Future of Napster

Napster's unique ability to offer an easy-to-use, high quality service has granted the company an unprecedented position in the music industry. Unofficially valued at more than $100 billion, it is no surprise that Napster and Shawn Fanning have been the recipient of numerous industry awards for technology, innovation and marketing. Not only can users search for new music by sharing music files among members free of charge

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However, Napster's recent alliance with Bertelsmann may be the first step towards future cooperation. Likewise, some performers may negotiate contracts to exclusively offer their CDs through the Internet as opposed to the traditional channels of distribution. Hoping to leverage Napster's popularity, Bertelsmann is betting on Napster's future by loaning $50 million to aid the company in developing a system that compensates artists, songwriters, publishers and music labels. However, Napster argues that it is protected by the "safe harbor" provision of the 1998 Digital Millenium Copyright Act, which states that Internet service providers are not liable if users of their service violate copyright laws. Their current presence on the Internet through barnesandnoble. Apparently, the opportunities available for businesses to capitalize on are endless. willing to pay $15 per month for the Napster service, potentially generating revenues of over $850 million per year.

In the future, companies can use Napster as an effective marketing tool, capable of reaching customers worldwide. The record labels now see that the Napster movement is too large - and way too valuable - to kill. The Recording Industry Association of America (RIAA) is representing five major record labels, including Bertelsmann who argue that Napster's service is illegal because no fees are paid for use of their music. According to a Webnoize analyst, "There are seven million college students in the U. Also, Bertelsmann can use this alliance as a stepping-stone to incorporate and expand their other business areas into the ever-growing demand of the Internet. Currently, Napster is engaged in a serious legal battle with charges of violating copyright infringement laws.

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