Napster Joins MusicNet

Napster (www.napster.com) announced on Tuesday that it will become an affiliate of MusicNet, the soon to be unveiled digital music platform backed by RealNetworks, AOL and three of the major labels.

For Napster, this may herald a new beginning, since use of the file-sharing service has been slowing in recent months since it was forced by the courts to ban certain licensed music. Despite the slowdown of Napster, usage of non-Napster peer-to-peer networks like Gnutella seem to be growing. According to analyst Phil Leigh at Raymond James Associates, usage of Gnutella traffic continued to grow 4.7 percent last week. Leigh reported that the peak number of simultaneous users grew to 49,250 as compared to 47,000, last week.

MusicNet has the backing of BMG, EMI and Warner Music Group, as long as Napster is "operating in a legal, non-infringing manner" according to a company news release.

"MusicNet is focused on providing a platform that will help consumers who are used to the experience of Napster to find, acquire and enjoy music in a manner that's legal, reliable, secure and supportive of artists and rights holders," said Rob Glaser, chairman of the board and interim CEO of MusicNet. "Today's announcement is great for consumers, for artists and for the recording industry. We look forward to providing the MusicNet service to the Napster community."

"Our relationship with MusicNet underscores our commitment to supporting the members of the Napster community — the world's most enthusiastic music fans — in discovering and listening to music of all types from around the world," said Hank Barry, interim CEO of Napster.

AOL, RealNetworks and Napster said they would expect to offer MusicNet-based subscription services to consumers by late summer 2001.

Today's news is a blow to Duet, MusicNet's chief rival. Duet was formed in a deal with Yahoo! and remaining music labels Universal Music and Sony.