Napster to launch version 2 in Summer 2001 
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Wednesday, 31 January 2001

As predicted by in our July 26th news story, Napster will re-launch as a paid subscription service this summer with a portion of the revenue going to the artists and songwriters whose copywritten material is traded across their servers. This news comes from German media conglomerate Bertelsmann AG’s chief executive officer Thomas Middelhoff.

During a speech at the World Economic Forum in Davos, Switzerland said he expected this new version of Napster to begin as soon as June or July of 2001. "The new service will co-exist with the existing Napster service," said Frank Sarfeld, senior vice president of the Bertelsmann eCommerce Group, in an interview. "Internet users will still be able to use the current Napster service." No breakdown of how royalties will be paid to artists and song writes has been released yet.

In a survey of approximately 20,000 Napster users by Webnoize Inc. it was found that the vast majority of them would be willing to pay up to $15 per month for the privilege of using the Napster service. The executives had thrown around a figure of $5 per month, but an exact price has not been released yet.

Saified claims that the second Napster will offer better service than the existing one. "It will offer reliable downloads, files will be scanned for viruses, and all songs will be available all the time," Sarfeld said. Currently the amount of songs available is dependent on the number of users that are logged on to the Napster servers. With Napster version 2, the tracks will be housed on Napster's own servers and will only be accessible by users with valid, paid accounts.

Last October, Bertelsmann formed a strategic alliance with Napster and provided them with a loan while the Napter was defending themselves against lawsuits from the record industry. It has been rumored that Bertelsmann currently holds a majority stake in Napster. Sarfeld strongly denies this.

Source: CNN online 01/29/01

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