New Napster on hold until next year while other song-swapping services forge ahead

Tuesday, October 30th 2001, 12:00 am
By: News On 6

LOS ANGELES (AP) _ Concerned that its rivals may get a bigger audience, the head of Napster hopes to press play for the embattled song-swapping service sometime next year.

Konrad Hilbers told his colleagues in the technology industry at the Webnoize 2001 conference Monday that Napster still needs to license more major record label music before the business is ready to go online, ``probably in the first quarter of next year.''

Once the poster child of insurgent online start-ups, Napster has been off-line since July. A federal judge ordered that the free music trade that brought the company 60 million users at its peak be halted.

Other companies continue to jockey for position in the burgeoning online music space, hoping to ink lucrative deals to distribute music via high-speed streaming over broadband networks.

Once merely a directory of legally downloadable music, is about to be reborn and will launch a new streaming music platform called Rhapsody.

Rhapsody, set to launch in about two weeks, is an application in which users can store and access streaming song playlists for a subscription fee set by independent distributors.'s chairman and founder, Rob Reid, says it will take time for a legitimate online music space to draw users from the current free-for-all that began with Napster.

``Over a period of time, probably three to seven years, we and other competitors in our space can offer something better than free,'' Reid said.

But the same problem exists for Rhapsody, as with many others _ no big-name content. So far, only has signed licensing deals with 37 independent labels to provide music content to the Rhapsody service.

The Big Five record labels keep their coveted content close to the vest and each has vowed to come out with subscription online music services themselves before year's end. Sony and Universal have partnered to form pressplay while MusicNet is the joint venture of Warner, BMG and EMI.

EMI has also signed a deal to license its catalog to pressplay, making it the only label ready to commit content to both services.

That could mean Napster would be relegated to the status of a latecomer to the digital music party if it restarts next year.

Analyst Phil Leigh, of Raymond James and Associates, said even if the company remains on hold until early 2002 it could possibly time its re-emergence successfully.

Leigh said Music Net and pressplay could serve to warm up consumers to the idea of subscribing for online music, to the benefit of Napster's relaunch.

``It doesn't hurt Napster if they come in later when the offering becomes more attractive,'' Leigh said.