Napster's alliance with Bertelsmann has a lot of people talking. Over the last
few days we've received some terrific feedback about Napster moving forward.
We've also heard some concerns, which for the most part seem based on false or
speculative information. We've put together answers to some of the most
frequently asked questions about the future of Napster as a community and as a
Why are you doing this?
The reasons are simple. We want to ensure the continued growth of the Napster
Community and we want Napster to realize its full potential. In order to achieve
these goals, we need cooperation from the major record labels, music publishers,
independent labels, artists and songwriters. Up to this point, we had been
unable to successfully gain cooperation from the major recording companies.
Bertelsmann will help us reach an acceptable solution with the labels and
publishers that will allow us to compensate artists, resolve the legal dispute
and grow our service to meet the needs of our expanding user base in a manner
that is consistent with Napster's values.
Does Napster still support MP3 file sharing?
Absolutely. Napster is synonymous with MP3 file sharing -- it's what we know and
love. And we will continue to fight for your right to exchange MP3 and WMA files
through the use of our software. Bertelsmann understands and appreciates that
MP3 file sharing is at the core of Napster.
Has Napster "sold out?"
No. We strongly believe that this alliance with Bertelsmann is an important
next step for Napster. Napster is a business, and as such, we are taking steps
to establish a business model, create value for our users and push the limits of
our technology. For months, we've been explicit about our goals to settle the
complex and costly legal battle that we're currently involved in. Bertelsmann
provides us with a very real opportunity to move forward. They're our first
major media company ally, and together we're going to work to bring the other
recording companies and music publishers to the table as well. As we move into
the future, we hope that you will not focus on speculation, but facts and our
actions. Stay tuned, we trust you will not be disappointed.
Will there be a fee to use Napster?
Yes and no. For the moment the Napster experience will remain exactly the same
while we figure out the best way to structure an enhanced membership service
and try to gain acceptance from other major recording and publishing companies.
In the coming weeks, we will be asking you for your input to help us define
exactly what this evolved service will be. Once we have come up with what we
feel is the best solution -- based in part on your feedback -- we will announce
our plans on our website and through the Napster software. We are confident that
we can devise a system that will make everyone happy -- Napster users, artists
and songwriters, as well as record and publishing companies. Our commitment to
you is that once we have the system set, we will always make sure that the
community knows exactly where the money is going.
Will Napster continue to offer a free service?
Yes! We are committed to creating a system in which users can choose to
participate without paying any money. We realize that Napster is nothing without
its user community -- you make us what we are. However, for a small membership
fee we feel that we can facilitate an enhanced service that you'll find even
more valuable and that will allow us to generate revenues to be able to make
payments to artists and songwriters for music files that our users share with
each other. We are working with Bertelsmann and other potential allies in an
effort to work out the details of how all this will work and we will, of course,
keep you fully informed as details become available.
Does this mean the legal battle is over?
Napster still believes that person-to-person non-commercial file sharing is
legal, and we are still fighting for your right to share music on the Internet.
This deal does not mean the legal battle is over. The lawsuit brought against
Napster by the RIAA has not been dropped. But, our ability to negotiate a deal
with Bertelsmann, which owns BMG (one of the five major record labels
represented by the RIAA in the lawsuit against us), proves that there is
considerable common ground. The courts will almost definitely have an opportunity
to weigh in on the legality of file-sharing copyrighted works. However, the deal
with Bertelsmann indicates that Napster might be able to reach an agreement with
the other record labels, regardless of the court's decision.
Who will be in control of Napster?
Napster is a privately held independent company and we will continue to make
business decisions as such. Our deal with Bertelsmann does not change the
ownership of Napster. Bertelsmann has given us a loan, and we have given them an
opportunity to buy some shares in the company at some time in the future.
Napster's current management will continue to run the company.
What is the time frame for these changes?
No changes will take place immediately. During the next several months, we will
be working with other major labels, music publishers, independent labels,
artists, songwriters and other interested parties to gain acceptance for our
membership-based service and we will be developing the technology that will
enable us to evolve in that direction. Our goal is to make this process
transparent. We will announce any and all changes well before they occur.
Will Napster feature only BMG artists?
Absolutely not. Napster enables users to share music files of artists on any
number of labels, artists without record labels, live recordings, etc., and that
is NOT going to change.
How will this help artists to be paid?
The revenues brought in by the membership-based service will enable artists to
be paid, whether they are on a major label or not. The formula that will be used
to divide up the funds to be paid to artists, songwriters and others will be
announced by the time the new model is implemented.