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Music Media

Bertelsman Seeks to Buy Napster 170

Posted by timothy from the buy-it-all-let-god-sort-them-out dept.
jbc writes: "SF Gate is one of several places carrying the story that Bertelsman, which already invested a significant amount of money in Napster, is now looking to buy Napster outright. This is based on an interview with Bertelsman CEO Thomas Middelhoff that was published last week in the German newspaper Die Welt."
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Bertelsman Seeks to Buy Napster More

Bertelsman Seeks to Buy Napster

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  • Sure, go ahead... (Score:5, Funny)

    by Kid Zero ( 4866 ) on Monday April 08, 2002 @12:21PM (#3303516) Homepage Journal
    You can have it, we're finished playing with it by now. :)

    • Corporate media mergers (Score:4, Informative)

      by Artifice_Eternity ( 306661 ) on Monday April 08, 2002 @12:32PM (#3303577) Homepage
      This comes on the heels of dozens of other mergers since the 1996 Telecom Deregulation Act. While I agree that Napster is not terribly relevant these days, it does look like the media titans are gradually getting more savvy about the Internet. Will they buy up the current crop of music-trading networks next?

      Michael Powell of the FCC is actually actively lobbying to tear down the rules against greater concentration of media mergers. And of course the RIAA and the companies that are buying up all the radio stations (Clear Channel, Infiniti, etc.) are helping to shut down webcasting. Pretty soon the media landscape could look something like this [subintsoc.net]...

      • This just in... (Score:1, Funny)

        by Anonymous Coward
        Will they buy up the current crop of music-trading networks next?

        In an unrelated story, Disney is seeking to buy Usenet & FTP :)

      • Re:Corporate media mergers (Score:1, Funny)

        by Anonymous Coward
        What I'd like to see is just one big corporation that owns all intellectual property in the world. Everything from music and movies to books and computer software. Basically if you can record it in any form whatsoever and distribute it, this company would own it. That way you'd just have one single company to interface with when negotiating licensing. Maybe make it easier and just have a portion of your country's tax dollars (say, 45%) automatically diverted to the corporation in case you may be pirating their property. This would be the most fair and equitable solution for resolving all intellectual property rights issues.

    • Re:Sure, go ahead... (Score:2, Insightful)

      by j-turkey ( 187775 )
      FWIW, there still is some brand equity left in the Napster name...weather or not the service sucks is not the question (we already know this much). Maybe its not an entirely stupid purchase.

      -Turkey
  • It'll probably end up like that Simpsons episode where Germans buy the Springfield nuclear plant from Mr. Burns, then when they realize it's completely broken down and profitless, they're forced to sell it back for a fraction of what they got it for...

  • Easiest way to ensure Napster's legality (Score:4, Interesting)

    by Dead Penis Bird ( 524912 ) on Monday April 08, 2002 @12:29PM (#3303554) Homepage
    By owning it, Bertlesmann can easily enforce the licenses on any BMG artist. With a label owning Napster, it lens it some legitimacy, and other labels may follow suit and sell licenses for their artists as well.

    An interesting experiment, indeed.
    • Yes, but by owning Napster, Bertlesmann also accepts liability for it.

      In other words, the other major labels (if they're still interested -- I don't know what they lawsuits have been doing lately) could effectively sue Bertlesmann -- and Bertlesmann has a bit more at stake than Napster did to simply declare bankruptcy or send out "Sorry, your investment returned nothing and now we're dead" letters.

      Frankly, I'm surprised by this move. Bertlesmann was already pretty much single-handedly funding Napster, thereby exhibiting a large amount of pressure as to Napster's next few moves, both technology- and litigation-wise. About the only thing Bertlesmann didn't already own was the liability aspect. I'm not sure why they'd bother to put "Sue Us Now" down in blood, at this point. Seems quite silly to me.

      Unless of course they're planning on rebranding Napster as "MyPlay2".

      • Wouldn't some sort of wholely-owned subsidary structure shield the parent company from incurring liability past it's investment in Napster?
      • I'm not sure how well Bman plays with the other kids, err, labels, but it's possible they have deals already set up. If *I* were a big label, & I wanted to break into the online distrobution biz, I'd buy into it. But I'd make sure I had deals with the other labels, either "I won't sue you for my content on your networks if you won't sue me", or they've got some interoperability plans set up, which is not likely.

  • Perhaps? (Score:3, Interesting)

    by tacokill ( 531275 ) on Monday April 08, 2002 @12:30PM (#3303560)
    Perhaps Bertelsman is taking a different strategic view of what is going on? They see the "other 4" going down an increasingly miserable road and decide that they are going to differentiate themselves by trying a sort-of napster like model (where piracy becomes a cost of doing business - like software). That's my guess.
  • Napster served a point at one time to show the world that mass-user file swapping technology is possible, but it's obsolete technology. It's like wanting to buy Windows 3.1. File-swapping software has evolved.
    • Hmm, I agree. How many people -know- about other options? Many only know of Napster (I just talked with a 16 year old and did not know there are other options). Another thought; the Industry heavys would NEVER spend money on a "fad"(even one eating their lunch), and for a company what they perceived at a dot-com price; firstly, they are Business and that means "cheap spenders" and will wait until it is pennies on the dollar, and second their big-company egos would get in the way because THEY perceive themselves (as always have been) "representing the music industry and artists" in the Business world. What would their partners and peers think? They could never be seen driving a Ford. Just some thoughts...
    • It's like wanting to buy Windows 3.1.

      Or Windows XP, for that matter.

  • Other things he's bought recently (Score:5, Funny)

    by btellier ( 126120 ) <btellierNO@SPAMgmail.com> on Monday April 08, 2002 @12:31PM (#3303568)
    - BETA-Max Videotapes, Inc.
    - Disco Ball factory
    - Menudo
    - 386 12mhz, 20mb HDD, 640k RAM and a copy of Commander Keen
    • "BETA-Max Videotapes, Inc."

      You mean Sony? That would be a great purchase!

      FYI, Sony still manufactures Beta cassettes, you can buy them from all sorts of video places, I get mine at the local Radio Shack [radioshack.com] though. Very nice picture, great for porting over to MPEG2 (it beats those crappy 8mm dealies)

      As for goofball buying up Napster, more like him buying into open reel VTR, now thats a dead format!
      • "more like him buying into open reel VTR, now thats a dead format!"

        Hah! You'd be suprised! When I was working for WMUR in Manchester, NH (during their move to a new building, I ran cables, wired up patch panels. Not a bad part-time job right out of high school). They still got commerical reels and ran them from the real. As late as 1999 they were still doing this. They were converting to running them off of a computer system (some propritary thing that they had custom built, it was sweet) but they continued to have problems with it and would turn back to the old reel units.

      • FYI, Sony still manufactures Beta cassettes, you can buy them from all sorts of video places, I get mine at the local Radio Shack [radioshack.com] though. Very nice picture, great for porting over to MPEG2 (it beats those crappy 8mm dealies)

        This is not BETAMAX, Sony haves all sorts of stuff called "Beta".
    • - 386 12mhz, 20mb HDD, 640k RAM and a copy of Commander Keen

      Wow, really? So did I! I got it for $4 on eBay, and since I had bought some other stuff, I got shipping for it for free! And Commander Keen [yahoo.com] is a pretty good deal at $20, too...

      But Napster? Man, I don't know what I'd do with that. If it was an intelligent, peer-to-peer, firewall- and proxy-friendly, fast, resuming, easy-to-use file-sharing system, that'd be one thing, but to today's internet users, it's almost as much of a folk tale as, say, B1FF [tuxedo.org]...

    • Back when I was a college student, the computer we had was so slow we could make coffee from scratch (including picking the beans) before it would boot up. It had a hand crank too. And to get to the computer center we had to walk 20 miles up hill (both directions) in the snow (even in summer). We would have killed for a 386 12mhz, 20mb HDD, 640k RAM!


      And what's wrong with Menudo?

  • Cool (Score:2, Funny)

    by NiftyNews ( 537829 )
    As long as we're selling things that no one uses anymore, I've got a stairmaster, 3 type of ab machines, and an upright piano that you might be interested in...
    • I'll go out on a limb and assume you bought them for yourself. 3, though?

      Usually exercise machine purchasers fall into three categories:

      • Smart and disciplined people usually take up running or biking and never buy an exercise machine. Sometimes they a peice of strength training equipment and actually use it, and some actually buy cardio stuff and use it too.
      • Smart people generally buy one or maybe two different types of exercise equipment in their lifetime. Usually after they get sick of tripping over a machine they don't use and they sell it, and they never buy another one because they're smart enough to realize they didn't use the first one why would they use any more?
      • Half-smart people keep buying exercise machines they don't use. Why they keep buying them is something of a mystery, but they usually blame a bad machine for lack of a workout and keep buying them. Or they may be continually lured by the promise of a machine that actually makes them look like a supermodel or sports star with only 10 minutes a day commitment. This is why they are only half-smart.
      • 'Twas exaggerated for comedic purposes, my good friend...

        I do own ONE unit, an Ab Roller, which works great for about a month until your muscles get used to it. But for effect it can't be beat...I always laughed when friends came back the next day after doing 3-5 "rolls" complaining about how much their abs hurt.

  • 15 million dollars? (Score:2, Insightful)

    by Kircle ( 564389 )
    Kind of interesting that Napster can now be bought for just 15 million dollars (or 80 + 15 million what have you). Compare that to them offering to pay the music industry a billion dollars just a short while ago, this pretty much says it. Naspster is dead.
  • Bertelsman, which already invested a significant amount of money in Napster, is now looking to buy Napster outright.

    I wonder if they'd be interested in buying a 1982 AMC Spirit with a blown engine. My neighbor's got one just sitting there, and these people sure sound like suckers to me.

    --saint
  • well how about the US First Amendment? seeing that congress does not want to use it any longer *cough*SSSCA/DMCA*cough* :-)
    • I think they're buying the brand name, and not so much the actual service. Think about it. In the future when they tell everyone that Napster is back online, pretty much everyone will check it out, just because it's Napster regardless of what form it's in.
  • We are supposed to be a community of geeks and as such do not know a lot on the business side of things.

    These businessmen should probably know a thing or two that we don't and have a business plan to make the outfit succesful. Like it or not, we cannot dictate what makes for a successful business since the net community has a bigger slice of "consumers" that will hungrily lap up anything it sees.

  • Enough is enough, no more April Fools jokes!!
  • No one uses napster anymore. No one is going to pay to download questionable MP3s. No one will make a profit on this model.

    The shareholders should sell for whatever they can get. If this company is dumb enough to buy a dead product, LET THEM. I mean, take the money and run.... as the old saying goes...

    A fool and his money are soon parted...
  • Does this mean that Napster is finally out of beta-mode?
  • Correct me if Im wrong, but the perspective of Napster going back online is somewhat non-existent. Ok, what are these people buying them? The network? The servers? The old technology? As far as Im concerned the only stuff they might be interested in is the user database, which is kinda old since napster is not used anymore for more than 1 year (im correct?) and this is time enough for most of its newbie users to change e-mail address (thus transforming the database into an whole bunch of useless e-mails and usersnames)...
  • that record companies will sue Napster's ass off then buy them back so that they will have a brand name + infustcture (sp) for their own music distrubition channel?

  • The only way (Score:2, Insightful)

    by Atrus5 ( 537814 )
    The only way napster could get people to pay for a service provided freely by others is to make a vast improvement. Looking at what they have now [napster.com], they offer no new features over Gnutella clients, except perhaps chatting and "paying the artists" which isn't enough to make most people pay for it. The only reason to use it is to clear your conscience. Just buying the cd (used, possibly) is cheaper for that.
  • am i just being nieve or do they really think people will pay for something they can otherwise get for free with any number of other programs out there (ie. kazaa, morpheus, etc...). I'm sure there will be the odd person out there that will support their efforts and pay the subscription fee, but really... I can't see too many people doing this.
    • Who will use the service? Perhaps the millions of people who claimed they *wanted* to pay the artists, but had no legal alternative for easy-to-download-music.

      Sadly, Napster's inevitable failure under Bertelsman will only confirm conventional industry wisdom: those who say they *want* to be legal are lying. Most users care more about getting their content for free than the 'convenience' they claimed Napster offered.

      --the verb

  • Does it really matter? (Score:5, Insightful)

    by hosebee ( 218054 ) on Monday April 08, 2002 @12:48PM (#3303677) Homepage
    Many adults like myself take a civil disobedience type approach to music sharing. I buy as many CDs (if not more) than I used to, but I unabashedly use these services to make sure those CDs I buy are going to be worth it. People that fall more or less in this category (I think) are waiting for a good digital music policy from the major labels(although there seems to be no light at the end of this tunnel).

    However, as I've seen with my little sister and her friends (and others of the pre-teen to teen age group), they have "grown up" on free music whenever they want it, so "why buy the CD?". At this young age, none of them had given any thought (nor had I at that age) to Intellectual Property and the other issues regularly discussed in the heyday of Napster.

    It is the difference between "The artist certainly has rights, but the industry is subverting the process to their substantial benefit, and this must be altered." and "Hey, we have a right to free music, how dare you take it away?"

    And obviously, this demographic is too large to ignore.

    -----
    Whimsiprotocol - n. 1. Standards of action or thought developed in a fit of ineptitude.

    • Re:Does it really matter? (Score:2, Insightful)

      by Anonymous Coward
      Two thoughts...

      1. They need to make the music easier to buy that to steal.

      2. They need to make the music affordable to the demographic that is stealing it. This may imply that costs are offset by higher prices for music in other demographics.
    • just remember that it's the older generation that builds the gap...

      (no i'm not fifteen anymore :^)
      • That's certainly true, don't even get me started there. Unfortunately, my little sister learns more about sex/dating/etc from "Real World" and shows of that ilk than from my parents. This irks me (partly because of what I think of "Real World" and "Dismissed" and etc etc etc), but she cares little for what I think on this matter....

        How many problems would cease to exist (or be vastly altered for the better) with better parents?
    • i grew up on free as in beer software, apple pickers groups, shareware, school sponsored software swapping events etc were common place

      as such i feel no moral obligations to pay for most of the software i use, there is an entire generation of us (i'm 22 for reference) and all this is is our siblings doing the same thing with different content, i know my little brother does, how about yours

    • Many adults like myself take a civil disobedience type approach to music sharing. I buy as many CDs (if not more) than I used to, but I unabashedly use these services to make sure those CDs I buy are going to be worth it. People that fall more or less in this category (I think) are waiting for a good digital music policy from the major labels(although there seems to be no light at the end of this tunnel).

      It's hard to say anyone is taking a "civil disobedience" stance on online music sharing. Many people are using it in a positive way , like you are, but that is in no way "civil disobedience". To take a stance like that, people would have to openly share music, and be willing to be arrested and/or sued for it and pay the penalty. Logging onto Morpheus (or Limewire, or Kazaa, or whatever) under an alias, and downloading music is not civil disobedience. Logging onto a public BB and using your own name with your own true contact information and trading music, and then making sure the authorities and the music companies know about it would be civil disobedience. Hiding behind Morpheus and the anonymity it provides is not civil disobedience.

    • How does it really matter... (Score:4, Insightful)

      by HiThere ( 15173 ) <charleshixsn@@@earthlink...net> on Monday April 08, 2002 @02:04PM (#3304129)
      The problem of the day is the decentralization of power. Groups like the RIAA, and individuals like Senator Hollings have caused this to be be problem of the day (for us, at least ... there are others with much more urgent problems, but we are us).

      I would be quite pleased if I saw a decent way to implement the decentralization of authority. Since I don't, I look at every social challenge to centralized authority as a possible good thing. The RIAA is going for maximal visciousness and to hell with the bystanders anyway, so there is no reason to consider how they feel about things. Therefore, the question to me becomes:

      How can the musicians be supported without simultaneously supporting the RIAA?

      This doesn't mean how can I as an individual support some particular musicians. I could clearly send them a check. It's how can we structure social interactions so that musicians are supported, and the RIAA is not. The clear and obvious answer "Support you local musicians .. buy direct!" works, but the number of such is quite limited. Direct purchase of music over the internet? Possible. CDs seems a more likely format than MP3s, if only for quality reasons.

      There exist problems here. Musicians are frequently coerced into signing exclusive agreements. Etc. So maximally popular groups will tend to be those that have the most advertising dollars spent on them. But this doesn't equate with the maximally talented groups. Perhaps groups that aren't picked as "STARS!!" could sell CDs directly on the web (from their home page) with the MP3s being used as cheap advertising? It might work.

    • Re:Does it really matter? (Score:3, Insightful)

      by Crag ( 18776 )
      However, as I've seen with my little sister and her friends (and others of the pre-teen to teen age group), they have "grown up" on free music whenever they want it, so "why buy the CD?". At this young age, none of them had given any thought (nor had I at that age) to Intellectual Property and the other issues regularly discussed in the heyday of Napster.

      I hope anyone who buys anything from me does so because they feel what I offer has value and they wish to cooperate with me by exchanging some money for some goods or services. I'd be sickened if I thought I was only paid because people thought they had to pay me.

      I don't think trade is something we learn by experience, but rather it's something which springs up naturally from a feeling of respect.

      On the other hand, intellectual property is a very strange concept indeed, and I will probably release all of my intellectual or artistic creations as public domain. The amount of work I put into them doesn't change with their popularity. Their value to others may be greater, and I would accept any compensation offered, but once the information is released, it has a life of its own.

    • It is the difference between "The artist certainly has rights, but the industry is subverting the process to their substantial benefit, and this must be altered." and "Hey, we have a right to free music, how dare you take it away?"

      Unless you're an artists involved with the major labels, who gives a shit about artists? I know I don't. Anybody who gets to make music as a full-time job already is so far ahead of the rest of us working slobs that unless they're living on the streets with nothing to eat I have little sympathy for whether they're making $100k or $10m per year.

      The real thing to protest is why the recording industry wants to expend so much energy fighting for an old, brick-and-mortar, album-based sales strategy that clearly is not in tune with how people want to relate to music.

      I have around 500 tunes I've gotten online. Nearly all of these represent back-catalog tunes from old 70s dinosaurs. I'd never buy the albums for $15 (the arists aren't that good and the entire album is full of BS filler material), but I'm pretty sure if I was browsing online I'd have bought the tune for a $1.

      That's over $500 the music industry *hasn't* made on me. I wouldn't have the music without Napster, but they *still* wouldn't have gotten me to shell out $15 for album with two songs I want.

      Even with Napster, I would have gladly paid $1 for each song -- no BSing around, better downloads and quality encodes, and so on. Why can't they figure this out?
    • It's not *JUST* music, or software, or movies or anything else for that matter. What you're seeing is the results of society wide elimination of any sort of honor system. Take a peek at this [cnn.com] (cnn). A lack of honor is running through our whole society. Unfortunantly, most people just don't (or won't) recognize that. It's all related folks. Kids cheat on tests and steal music and software. The RIAA uses it's power to try and lock competitors out of the game. A certain software company releases substandard software in order to maintain their marketshare and gain an advantage in unrelated fields. Companies and stock brokerships lie and cheat to make a few bucks. Politicians say anything and do anything in order to get elected. You know..people complain about how our youth (and I'm one of them for the most part..) have a complete lack of morality when it comes to IP...the business and political (hell even the religious world) isn't exactly making such a good example of things. What's especially galling in this case is the actions of the RIAA. They lie, cheat and steal in order to lock up the marketplace from true competition, and abuse the artists. All of a sudden they complain when kids are lying and stealing from them. Bunch of hypocrites.

  • Damn ... whoda thought (Score:4, Funny)

    by Blue Neon Head ( 45388 ) on Monday April 08, 2002 @12:48PM (#3303681)
    You can have no business model, no immediate prospects for profit, be crippled by lawsuits, and have the little service you offer stifled by court order - yet still walk home with $15 million extra in your pocket.

    I bet Shawn Fanning has no regrets.
    • Not to mention "have other products on the market which are better than your own, and are free". I mean, how could anyone possibly pay for a piece of software that you can get for free? It's inconcievable!
    • Doubt Fanning (the younger) got much of anything out of this one. I suspect that more than $15 was dumped into Napster through VC and angel investment, and most likely, much, if not all, of it is going to be skimmed off the top by preferred stock holders before it gets to the common stock holders like Shawn. Added to that, I doubt he has a significant slice of the pie, so whatever crumbs _are_ left, won't amount to much.

      This, for a company that at one point in time was one of the hottest things on the Net.

      Nope, I'm sure he has some regrets...

  • Bertelsman bought and closed myplay (Score:5, Insightful)

    by PhrackCreak ( 136718 ) on Monday April 08, 2002 @12:49PM (#3303687)
    Bertelsman bought myplay on May 30th, 2001. Fast forward to early 2002, Bertelsman closed myplay's offices, laying off all but a couple of engineers in charge of wharehousing the software.

    Is this some new tactic to buy and close music software companies?

    • Rhetoric?
      Of course not, it is blatant Capitalism; buy up competition and BURY them, even if they are small and maybe of no consequence; the consumer must ONLY see your product. In Toy Story, the Dino says that he is from Mattel, but then explains not really, that he was actually part of a small startup bought out in a leveraged buy-out by a mega-conglomerate.... Mattel has been doing this for years.
    • it doesn't seem to be a good tactic given the fact that napster is dead already... (see earlier posts) not evrything is a conspiracy, sometimes companies have strange business tactics :-)
    • let em.
      we'll keep writing new stuff.

      if Bertelsman want's to buy crap software for a fortune on the end of it's life cycle, let them. if they close napster, who here is really gonna get screwed....
      only the people who subscribed to the business model, proving to those who thought it was crap in the first place that they might be right.
  • Honestly, who cares, Bertlesman is probably just buying Napster to put it out of its misery. Napster's new (and old) business model was fundamentally flawed from the start. Yes, of course lets charge people $9.95 a month to pirate^H^H^H^H^H^H "share" songs with each other. First thing, pirates, warez dudes, whatever they're called don't, dare I say won't, pay for the right to pirate stuff. That totally defeats the purpose of pirating material-i.e. not having to pay for it. Second, not to beat on a dead bush, but look at the fifty bazillion other file sharing programs online right now. Sure none of them have duplicated the ease and reliablity of Napster, but they get the job done, and other than spyware (which has its own problems), they do not cost you a thing. Napster, can be bought out for all I care cause regardless of when or if it comes back no one is going to pay for a service they can get free.

    ________________

  • Filesharing clients... (Score:3, Insightful)

    by fruey ( 563914 ) on Monday April 08, 2002 @12:50PM (#3303693) Homepage Journal
    ...are only as good as the number of users they have. Napster sucked, but everyone had it, so it sucked a little less.

    <state the obvious> Napster is not the phenomenon, filesharing is. </state the obvious>

    However, that they are ready to pay between $15 and $30 million USD makes me wish I had written a peer-to-peer with central DB software client. Yikes.

  • Who cares? (Score:1, Insightful)

    by Anonymous Coward
    Can we please get a "Napster" topic here so that I can filter it from the slashdot homepage?

    I mean really...

  • Divide and Conquer (Score:3, Insightful)

    by thelizman ( 304517 ) <hammerattackNO@SPAMyahoo.com> on Monday April 08, 2002 @12:53PM (#3303716) Homepage
    So, first the music industry (BMG included) pummels Napster into oblivion with lawsuits, then once the company has had enough injunctions to keep it from operating at a profit, and once their stock is on the verge of being downgraded to junk status, they buy them up.

    Isn't there a law against that already?
  • Wasn't it last year when Berltlesman tried to get in league with Napster, and that CEO was removed? I thought I read a lot of press about that being a very bad move for BMG. CEO was for it, but the board was not.

  • Could be a good thing... (Score:4, Interesting)

    by NanoGator ( 522640 ) on Monday April 08, 2002 @01:12PM (#3303805) Homepage Journal
    The first record company to properly embrace the internet may be the first to recieve money from me when I end my boycott of the RIAA.

    It's possible that they'll revamp Napster and turn it into something interesting. For example, what if they put up a server with tons of bandwidth and a ton of interesting songs available, complete with a reasonable per-song price. That'd be far better than any other record label is producing nowadays and would be a step in the right direction.

    I just hope they don't put stupid restrictions on it like 'you have to use .WMA format' or 'you cannot legally burn it to a CD.'

    Maybe I'm being over-imaginitive, but it'd be nice to see a music company show some interest in the new market created by the internet, instead of trying to shut it down.

  • It will never work (Score:2, Interesting)

    by zecg ( 521666 )
    It will never work. Napster is a dead cow, the brand name in this case is tied with keywords like "controversy" and "piracy" in the mind of the average consumer -- and "server down"/"lame" in the mind of the l33t. So buying it for its brand name is not too smart. And the code was not much to begin with. Why bother?
  • 1) Lift up toilet seat
    2) Empty wallet into toilet
    3) Flush
    4) Repeat as you feel is necessary

  • HOW much? (Score:4, Funny)

    by Rogerborg ( 306625 ) on Monday April 08, 2002 @01:30PM (#3303897) Homepage
    • Bertelsmann has already loaned Napster an estimated $80 million and has the option to acquire a large stake in the company. Buying Napster outright will reportedly cost Bertelsmann $15 million to $30 million.

    Oh yeah, .com economics. I'd almost forgotten. Actually, this looks a lot like a sort of weird poker game:

    • Bertelsman: We've already bet $80 million and still not seen a red cent back. What the hell did you do with it?
    • Napster: Haha, it'll cost you another $15 million to find out. You haven't got the balls.
    • Bertelsman: Here you go. Show your hand.
    • Napster: Ah. Fuck. [pitter patter pitter patter...]

    The one thing that I would bet on will be that the first thing Bertelsman does is to have a good hard look at Napster's accounts and figure out what the hell did happen to that $80 million. They can't have spend it all on lawyers and a crackpot crippleware scheme, surely? Surely!

  • If what I'm thinking is right, Napster costs money to use and people have already jumped ship to other free incarnations of the same idea. The only thing left to buy is the few users that feel morally obligated to pay for the service (who probably weren't along for the ride in the early days). It'd be nice to have that kind of green to throw around stupidly.
  • ...how is Napster a "business"? I mean, Shawn Fanning wrote a program, called it Napster, put it on a website, called it www.napster.com, and that's it. Napster wasn't adware or spyware, Napster.com didn't (IIRC) have ads, and no one was supposed to (ideally) ever pay any money ever. Now of course there's going to (supposedly) be a pay to use Napster sometime in the future, but that may or may not ever come to fruition.

    The part I don't get is how is Napster a "company"? How did they ever make money? Did they ever make money? They had venture capitalists and investors, but what were they telling these people? "Hey we've got a free program and a free website and a server but don't worry - some day we'll see profit roll in somehow!" Was the subscription model always the plan? Has this model (free services first, then charge once the investors and VC's want some actual money) ever worked? And why haven't all these VC's and investors pulled out by now? If the legal throubles hadn't killed off Napster, the investors and VC's surely would have by now.

    I have an online side business that doesn't do a whole lot of business yet. If I were to sell it, I probably couldn't get $1000 for it. If it made millions of dollars a year I could get a good price on it. As far as I can tell, Napster has never made dime one - how is it we're talking MILLIONS for Napster? Who are these people fooling?
    • What these people are buying is not software, not revenue, not a company... they are buying a customer base. Simple as that. It's totally for marketing purposes. They don't give two shits about the technology... except for the fact that it will help them sell stuff to the users in the future.
      • Good point, but they're buying a customer base that doesn't give two shits about BUYING stuff - that's the rub. They're targeting the biggest freeloaders - the ones who aren't even savvy enough to use a Napster alternative - and they're going to use these people as a revenue stream?
  • It's a hole in the internet you throw money into.

  • Oh yeh? (Score:1, Troll)

    by autopr0n ( 534291 )
    I've got a bridge to sell him...

  • Napster stock (Score:1, Troll)

    by fobbman ( 131816 )
    Is Napster a privately-held company or can I download shares on the P2P network?
  • Perhaps I'm being a bit redundant after all the other posts here, but I feel this bears repeating: It seems that the record companies are taking our purchasing habits for granted. We don't HAVE to buy CDs, but we do. I've watched prices go up, and I'm appaled at the markup on these discs. It probably takes less than 50 cents to print and manufacture these things, plus the studio costs. Does anyone else think $15 dollars a CD is price-gouging? It's especially bad that many CDs now are in the 20-40 minute realm instead of the 74 or even 80 that the CD can hold. You can fit Enya's last 2 releases onto an 80-minute CD, in fact. I might not mind this if the artists served as the beneficiaries of this, but it seems like most artists get less than a dollar per CD sold. I'm curious to find out where all the money goes. So FIRST, the companies insult us by keeping the prices high and keeping the artists out of the loop with profits. SECONDLY, they attempt to squelch filesharing, both by legal means, and by corporate means. Now, the companies seem to be under the illusion that we WANT to pay for a limited selection of tracks we can only listen to a fixed number of times without transfer. Its worse than the free filesharing servers (KaZaa et al), and it costs money. THIRD, the record companies are trying to prevent computers from playing audio CDs. I've even heard that the latest Celine Dion CD will crash your system if you play it.... though I'm unsure if that's the fault of the music or the added "CrapTus Shield" software on it. I think the record labels made a mistake by taking down Napster.... now, decentralized alternatives are now in place that probably won't flinch no matter how many court orders you fling at them. Taking down Pablo Escobar didn't end the drug trade... it just decentralized it, and other, smaller drug dealers cropped up to take his place. The record companies seem to have done the same thing: there are about 3 or 4 major filesharing servers now instead of one, and the largest one (KaZaa) has about 1.5 milion people logged on at a time. Though I think it unlikely, if the services we have now are shut down, more will just pop up in their place. I think the labels have lost the online war, at least for now. On the copy-protected CD issue, I think that the music labels underestimate the ire of consumers and the intelligence of the hacker community. No matter HOW MUCH copy protection you put onto your media, there will always be some way to break it. By putting this copy protection onto the CDs, the companies risk alienating customers who aren't even trying to pirate in the first place -- some CD players have a hard enough time playing regular CDs, much less copy-restricted or copy-protected ones. We must BOYCOTT these copy-protected CDs, and also meet the industry blow-for-blow by cracking this copy protection. If we can prove to the music industry that it is not feasible (money-wise, of course) to implement restrictions on our music, they might back off of this. But make no mistake, we are heading for a war. This is but one facet of the whole global-against-regional fight that seems to be going on as multinational corporations seek to expand. To borrow a quote from a certain comic-book inspired movie -- "I may not be on the right side, but at least I've chosen." I implore other /.ers to chose also.
  • Is this the same BMG that runs the 12CDs for the price of one deal? If it is, I could see them enticing people by putting up a server with tons of bandwidth and their entire catalog available.

    In short, I think it would work a lot like a music club does through the mail, only with MP3s instead of CDs. I think that's a business model that would work, although I don't understand what they need Napster for.
  • Bertelesman has been simply the most forward thinking and proactive among the big 4. Instead of investing in a futile battle to stem the digital tide, they embraced the digital future by investing in Napster. Now they own digital distribution, for all practical purposes.

    Napster was first, is most familiar to users, and has the largest market share (even after being dormant for a few months). It's still the best designed, easiest to use music downloading application. It set a standard which will now be hard to compete with.

    Eventually, one of them had to do it. Bertelesman took the initiative. Sony, Universal, and Time-Warner snoozed on this one- and lost.

  • Does Napster have any (puke) software patents that Vivendi might want to get its fingers on?

  • Unfortunately I don't believe record companies could produce a music-buying model that is better than the one we have right now. We can get practically any song we want for free. How can they beat that? Internet music trading has come a long way, and it really doesn't have that much farther to go.

    Everybody says they're willing to pay to download mp3's but
    (1) what's the highest price you'd pay per song? People talk all the time about $1 per song, but I think you are dreaming if you think it'll be that low.
    (2) You can honestly say you'd pay for something when it's completely free somewhere else?

    • The solution is for a group of MAJOR artists who have already had hits to join together-screw the record companies! No one gets a cut who hasn't made music. Your cut decreases each year that you don't make music or that your new music doesn't sell. Everyone who wants to be hosted gets hosted, as long as they provide the hosting fee. Create a service that requires you to be a member to trade, and have different charges. The artists who join agree to release their songs for download.

      Customers could choose how they want to be charged:

      per day

      per week

      per month

      per year

      per compilation

      the right to dub a show

      Each artist will get paid depending on what people download from them.

      -And here is the big one: Don't release this stuff on CD! That's right, mp3 only, and not this low-quality crap, either. Everything should be 192kbps. This way, people won't be able to just buy, encode, and upload. Anyone who wants this stuff comes directly to you.*

      Also, the way radio stations license music needs to change. Currently, stations pay to play music. This is ludicrous. You should give your mp3s(all of them) to radio stations, and the stations can play the music all they want. They just can't give away the actual files. That's free publicity! And instead of having just one song out(a single), people will get exposure to much more of your music(If you release what used to be a cd's worth of music[10 songs or so], songs that would have never been heard will be heard. People will hear songs that never would have been considered as singles. The better the music, the more frequently it will get played, and the more exposure for you). *I know people will say "Why go to you when I can go somewhere else?" The truth is that you could go somewhere else, but the first people to get the music would have to be buying it directly from you, and you would be getting a bigger piece of the pie right off the bat. Plus, since you are the artist, you can offer extras- autographs, passes to your shows that give people the right to bring recorders into your shows, deals on merchandise, etc.

  • At the rate the music industry is going, it seems like soon they're just going to implement your "RIAA fee" in your taxes.

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