GLOBAL NAPSTER USAGE PLUMMETS, BUT NEW FILE-SHARING ALTERNATIVES GAINING GROUND, REPORTS JUPITER MEDIA METRIX

While time spent using Napster in the U.S. drops 70 percent, Bodetella, Audiogalaxy and Imesh become the latest adopted alternatives

Vivendi Universal's Edgar Bronfman, Jr., RealNetworks’ Rob Glaser, AOL Music's Kevin Conroy, Bertelsmann e-Commerce Group's Andreas Schmidt and Napster's Hank Barry to address the technological and legal forces reshaping the music industry, July 23-24 at Plug.In in New York City

NEW YORK, July 20, 2001 — Jupiter Media Metrix (NASDAQ:  JMXI), the global leader in Internet and new technology analysis and measurement, today reports that total time spent using the Napster file-sharing application plummeted 65 percent among home users in 14 leading wired countries, from 6.3 billion minutes in February 2001, Napster’s peak month in terms of both time and unique users, to 2.2 billion minutes in June 2001.  According to Media Metrix ratings data, unique users of the application dropped 31 percent, from 26.4 million to 18.3 million over the same period.  These figures represent more than 85 percent of the worldwide online population and include usage in Argentina, Australia, Brazil, Canada, Denmark, France, Germany, Italy, Japan, Norway, Spain, Switzerland, the United Kingdom and the United States. 

But while Napster usage has plunged globally, recent U.S. data reveal the early adoption of several new file-sharing alternatives.  In May 2001, six file-sharing applications other than Napster appeared in the Media Metrix U.S. reports, up from five in March 2001 and up from one in January 2001.  Bodetella, a client designed for the Gnutella network, held steady at around 1.0 million unique users between January 2001 and May.  Audiogalaxy, the second most popular file-sharing application, had 978,000 unique visitors in May 2001, up 78 percent from March 2001, the first month it was reportable.  Next was Imesh with 474, 000 unique visitors, up 11 percent from April 2001, its first reportable month.

“Last year Napster became one of the fastest growing software applications Media Metrix ever reported, with its U.S. user base nearly quadrupling within six months of the application’s debut into the ratings reports,” said Doug McFarland, president, Media Metrix, the online ratings unit of Jupiter Media Metrix.  “Today, the Media Metrix ratings show a wide scattering of the former Napster audience to various other music file-sharing resources.”

Napster’s Rise and Fall: The Impact on the Music Industry

“The time the Napster litigation bought the labels has run out and the grim reality is that Napster’s audience is beginning to be fragmented across many services, which will be very difficult, if not impossible, to litigate against in the same way,” said Mark Mooradian, vice president and senior analyst, Jupiter Media Metrix.  “The next generation of underground file sharing services underscores the need for legitimate music providers, and not just the major labels, to act promptly, putting battles over platforms and copyrights behind them as soon as possible.”

Definitions for Media Metrix Digital Media and Web Ratings

* * * Jupiter Media Metrix was not yet reporting in Argentina and Norway.

. . . Statistically insignificant traffic.

Unique Users: The actual number of total people who used the reported application at least once in the reported month. All unique users are unduplicated (only counted once) and are in thousands.

Total Usage Minutes (000):  The total number of usage minutes spent at the application during the course of the reporting period.

About Jupiter Media Metrix and Billboard’s Plug.In

These and other critical issues impacting the music industry will be addressed at Jupiter Media Metrix and Billboard magazine’s sixth annual Plug.In Forum in New York City, July 23-24.   More than 40 leaders from all sides of the music industry – including Edgar Bronfman, Jr., executive vice chairman, Vivendi Universal; Rob Glaser, founder, chairman and chief executive officer of RealNetworks, and acting CEO of MusicNet; Kevin Conroy, senior vice president, head of AOL Music; Andreas Schmidt, president and chief executive, Bertelsmann e-Commerce Group; and Hank Barry, interim chief executive, Napster – will convene with Jupiter analysts to examine the critical issues involved in music distribution and retailing, from the battle for market share to the latest file-sharing technology.