The Recording Industry Association of America (RIAA) is suing
Napster and, according to both parties, all settlement attempts
have failed. Napster’s CEO said this week that the company had
offered to charge users up to $5 per month in an attempt to settle
with the RIAA; but the RIAA refused the offer.
While the RIAA might win the case and put Napster out of
business, the majority view seems to be that it would be
short-sighted for it to do so.
Napster claims to have built up 32 million users. If Napster is
shut down, logically, most of the users will look elsewhere for
their on-line music. One alternative source is Gnutella, a file
sharing system that has no database of users because files are not
held on a central server, making it difficult to monitor.
There is apparent scope for an ISP to enter the settlement
negotiations between Napster and the RIAA, in part due to its role
as a “neutral” party.
An ISP might be able to persuade the RIAA that it can take over
and regulate the Napster service, ensuring financial reward for the
record industry. If Napster was taken over in this way, members
would be told that in order to continue using the service, they
will have to change ISP to Napster's new owner.
In the US, most ISPs still charge monthly subscription fees
anyway, so increasing the fee to generate a sum that could
compensate the record industry might scare away fewer Napster users
than charging them per-downloaded song, a business model favoured
by the record industry. An ISP that controlled the Napster brand
would be in a powerful position, although it would face the expense
of harnessing all the traffic in the large MP3 files.
According to a reporter from Inside.com, an information and
analysis site for the media industry, Napster has asked one of the
interested ISPs for a figure “in the vicinity of $500 million.” An
official from the ISP who spoke to the reporter apparently
considers the figure too high because it is based on an unrealistic
number of Napster users following the service to the ISP and
because Napster is optimistic about its prospects in court.
