Napster to pull plug on copyrighted music

Napster to pull plug on copyrighted music
REUTERS

SAN FRANCISCO, MARCH 3: Napster Inc., facing a corporate death sentence at the hands of a federal judge, bought itself a brief reprieve on Friday by promising to block users from accessing some one million music files covered by recording industry copyrights.

Some industry analysts said, however, that the online music song-swap service may still be singing its swan song.

Napster's last-ditch effort to conform with copyright law came as US District Judge Marilyn Hall Patel held a hearing on how to formulate an injunction which fans fear could put the it out of business.

Patel ended the hearing with a promise to draft an injunction order ``that is workable and makes sense'' -- but gave no indication when she might issue it. Legal observers do not expect a lengthy wait.

Meanwhile, Napster's vow to filter out copyrighted music files starting this weekend sparked cries of protest from users, who have made the service wildly popular around the world by trading everything from Chinese pop songs to Beethoven symphonies compressed into handy MP3 computer files.

`Oh my God. I'd better finish downloading,'' said one Napster devotee scrambling to grab as much music as possible before the screening system takes effect.

Napster's lead attorney, David Boies, said the new copyright protection system should allow the company to stay in business -- although many industry analysts questioned whether Napster would still have the same appeal if it no longer offers the world's top pop hits for free.

``I think Napster will still be the best music service out there, (but) it will not be the same,'' Boies said.

Napster's offer came amid some two hours of argument from its lawyers and representatives of the Recording Industry Association of America (RIAA), which has sued the Internet upstart on charges of facilitating widespread music piracy.

Industry analysts said while Napster's move may have won it more time to negotiate with the recording industry, it did not mark a sure path to survival for the company.

Although the two sides have scheduled more mediation next week, Napster's decision to play by recording industry rules could weaken its overall negotiating position while driving once-loyal users to other services, they said.

``I'm sure that Napster usage will be very high this weekend and it will be interesting to see the cat-and-mouse games as users try to get around the blocking schemes,'' said Malcolm Maclachlan, analyst with technology tracking firm International Data Corp. ``The main effect will be to grow usage on other peer-to-peer networks like Aimster and Gnutella.''

Ric Dube, an analyst with Webnoize, said the recording industry would likely continue to press for a quick injunction to make sure Napster agrees to all of its terms.

``Once the injunction is in place, these two sides could come together for a negotiation,'' said Dube. ``Napster hasn't said uncle yet and the record companies need to hear before entering any discussions.''

The court battle over Napster's future -- involving everyone from the company's youthful founder to major rock stars and one of the most famous lawyers in the country -- is a defining case for copyrights in cyberspace and could affect the way books, movies and all entertainment will be distributed online for years to come.

At Friday's hearing, Napster's lawyers said the company was racing to perfect new software to filter out copyrighted material and hoped to reach agreement soon with the recording industry on how to identify such material.

``We have come considerably closer together on the issue of an injunction,'' said Boies, who represented the Justice Department in its antitrust suit against Microsoft.

Boies said Napster would begin policing itself by blocking access to some one million files o copyrighted music over the weekend, with more to come.

Most of activity on Napster involves the unauthorised trade of copyrighted material. But Napster says it is unable to identify which files are copyrighted and which are not, putting the onus on the RIAA to provide lists of material it believes represent copyright infringement.

Lawyers for the recording industry, joined in court Friday by lawyers representing artists Metallica and Dr Dre, said they had already submitted a list of some 5,600 song titles -- each of which could account for a vast number of separate files on the Napster system -- to be blocked.

While the RIAA's legal team pointed out that seriousquestions remained about how the new screening process would work, RIAA President Hilary Rosen had some rare words of praise for the online company, saying it was the first time Napster had sought to obey existing copyright laws.

``We made a lot of progress in court today,'' Rosen said. ``It is important for me to give some credit to Napster today.''

Napster's service has attracted about 60 million users who swap songs for free by trading MP3 files, a compression format that turns music on compact discs into small digital files.

The major recording companies, represented by the RIAA, first sued Napster in December 1999, claiming it aids copyright piracy and costs them billions of dollars in lost sales. Patel issued an injunction on July, but a federal appeals court two days later stayed her ruling pending review.

The embattled service was dealt a blow Feb 12 when a three-judge panel from the appeals court ruled that Napster could be held liable for copyright infringement and that an injunction, which could essentially shut down Napster, was not only warranted but required.

In its ruling, the panel ordered Patel to require therecord labels to identify which of their copyrights were infringed on Napster. Friday's hearing was called to hammer out the details of how such an order would be implemented.

In an effort to draw up a workable long-term business plan, Napster has embarked on a project with major investor Bertelsmann AG to develop a new, subscription version of its service, expected to be rolled out this summer.

The company has also offered the recording industry a five-year $1 billion deal to enable it to swap their music on a new secure service, but this has drawn poor reviews from its main opponents, which include Vivendi Universal's Universal Music, Sony Music, Warner Music and EMI Group Plc.

(With additional reporting by Peter Henderson in SanFrancisco and Sue Zeidler in Los Angeles)