Napster announced Wednesday an agreement with media giant Bertelsmann, parent corporation of BMG, to end its free distribution of music over the internet. Under the deal, users would pay a monthly membership fee to access Napster’s file-sharing service, a complete turnaround from the company’s original mission. This deal rightly compensates copyright holders who maintain legal ownership of the music distributed through Napster’s service, but the agreement will ultimately hurt the music industry and listeners. Regardless, Napster has now abandoned its original mission of providing free music to fans.
The agreement comes as Napster defends itself against a lawsuit filed by BMG and other major recording companies. The 9th U.S. Circuit Court of Appeals is set to rule on an injunction against Napster for abetting copyright infringement. In the face of this pressure, Napster caved.
Napster never made a profit despite having more than 38 million users. Under the new plan, Napster and Bertelsmann would benefit from a new online stream of income – money that would also trickle down to copyright holders in the form of royalties for downloaded songs.
Although Napster finally plans to compensate the people who make the music the company distributes, the company has already reshaped the industry in a way that cannot be reversed. The Napster service is incredibly popular, and evidence exists showing CD sales increased since Napster became widely used. With this in mind, the recording industry appears to be pursuing a senseless victory in its quest to prevent Napster users from downloading free music. If greater sales of CDs are a result of Napster use, this deal could hurt record companies’ bottom lines more than they realize.
Ultimately, the deal between Napster and Bertelsmann will have little effect on the movement to maintain free music on the internet. Other programs stand poised to replace Napster as the primary service for music fans and copyright pirates. Many of these programs, such as Gnutella, require no centralized server to distribute files, making it nearly impossible to shut down the service.
Napster’s deal with Bertelsmann represents a tremendous turnaround by the internet company. Clearly Napster, like the record companies, is focused on future profits. The only loser in this deal appears to be music listeners.