posted Oct 31, 2000

Bertelsmann, Napster to Develop Music Service
Music & MP3
10/31/2000; 12:48:57 PM

'Entertainment giant Bertelsmann AG (BTGGga.D) and controversial song-swap company Napster (news - web sites) Inc. said on Tuesday they formed an alliance to develop a new secure file-sharing music service.'

Also see an e-mail posted onto the Napster Weblog from the Bertelsmann Chairman:

'We have entered into a strategic alliance with the Internet-based music exchange Napster. Under the terms of the deal, Bertelsmann will support Napster financially in the establishment of a legal business model. In return, we will receive an option for the acquisition of a stake in Napster.'

This means little to nothing. What will have real meaning is what said "legal model" is.  Is it the subscription service that everyone talks about? Or is the music industry simply covering its bases, and entering into a legal partnership with Napster (almost "a favor you can't refuse"), with every intention of destroying them?  I don't think Napster's 33 million users are loyal to Napster, I think they're loyal to the music they get. If the "legal model" is significantly more difficult for the users to use, Napster will simply vaporize, and then who cares how the lawsuit turns out? Certainly not Bertelsmann!

I don't know enough yet to judge this either way. But I'm keeping my eye on it.  This could be great or horrible, but probably not much in-between.


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