The Critical 'I'

Read. React. Repeat.

Monday, July 28, 2003

NAPSTER 2.0
nap attack
It's co-opt time as Roxio Inc. is rolling out the second coming of Napster. Roxio bought up the assets of the defunct Napster at auction for $5 million. I seem to recall that some online porn company was intending to buy them too; I wonder if they drove up the price?

I can't help but marvel at how the former scourge of the music industry is now going to serve as one of its legitimate sales channels. It's kind of like if Mao Tse-tung or Lenin suddenly were hired as sales directors for General Motors.

The mention that there's some lingering "nostalgia" for Napster seemed strange to me at first, but upon thinking about it, it makes some sense. Napster built up a good amount of brand identity while it was around; indeed, for tons of people, "Napster" became synonymous with downloading free music. By bringing it back as a pay-for service, it could attract former users who have been cool to other digital music sales. Not only that, but when those users see that Napster is no longer free, it could impart upon them that paying for music is the new way to play when getting music online. Services like Pressplay were born "dirty", in that they were pay-for to begin with, and that helped keep people away from them (that and the idiotic use restrictions they placed on their music files). But Napster's "bad boy" roots probably gives it the street cred it needs to be successful ultimately, even in it's legitimized reincarnation. (Keep in mind, I'm talking about the effect on those filesharing users who are not particularly tech-savvy, and don't follow the industry news; it's easy to forget, but those people are the market majority.)

Obviously, if Napster 2.0 is successful, that could make it more appealing for other filesharing services like Kazaa and Grokster to sell out before the noose closes on them. With the RIAA stepping up its efforts to stamp out filesharing, things could get untenable for those services in the near term, in two ways:

- The services themselves would be targeted by the industry with neverending legal challenges, which even if won, would be a big drain of time and money;

- As more users start to abandon the services (out of fear of litigation), the very thing that makes those services work would dwindle--i.e., a large number of computers with large numbers of files available for copying; if the number of Kazaa users logged on at any one time drops from millions to tens of thousands, or less, the library of songs available shrinks drastically.

Given this, it would make sense for their owners to bail out in the best possible scenario; that would be to sell to someone who would want to emulate the Napster 2.0 model by trading on a well-known brand that has millions (in the case of Kazaa) of users. Even if most of those users don't fall for the shift from free to pay, there'll still be a significant number of users that will, and it's better than starting from zero.