Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

Napster Deal Fails, Employees Fired
nbc3 ^

Posted on 09/03/2002 9:39:26 PM PDT by chance33_98


Napster Deal Fails, Employees Fired
Judge Ends Hopes For Revival

POSTED: 6:26 p.m. PDT September 3, 2002

REDWOOD CITY, Calif. -- All of Napster's employees were handed pink slips Tuesday evening, following a judge's decision to block the sale of the company.

According to a Napster spokeswoman, just before 5 p.m. Tuesday, 42 employees -- including founder Shawn Fanning -- were laid off.

Tuesday morning a Delaware bankruptcy judge ruled Bertelsmann A-G could not purchase the remains of the defunct music-swapping network.

The decision was the death of a deal that could have revived Redwood City-based Napster as a legitimate service. The decision will likely force the company into Chapter 7 liquidation.

Bertelsmann was Napster's chief financial investor. It had already sunk $85 million into the network. The German company wanted to purchase the rest of Napster for an additional $8 million.

Napster has been off line for more than a year.

Suits by major record labels destroyed Napster. Those companies also filed motions in the bankruptcy case objecting to the Bertelsmann sale.


TOPICS: Breaking News; Business/Economy
KEYWORDS:
Navigation: use the links below to view more comments.
first previous 1-20 ... 41-6061-8081-100101-112 next last
To: chance33_98
This reminds me of when I would copy cassette tapes from friends and make them for them. I knew that it was technically illegal, but get real - it was just small time sharing between friends. But I was never juvenile enough to believe that because I could get away with that, I should have the "right" to start up a billion dollar business doing the same publicly. ROTF!

Of course we can't "stop" file swapping, but we can make it inconvenient and somewhat underground, just like cassette duplication 20 years ago.

61 posted on 09/04/2002 7:39:18 AM PDT by elfman2
[ Post Reply | Private Reply | To 1 | View Replies]

To: Nick Danger
"The [porno] industry is literally dis-integrating (in the economic sense) into thousands of little pay-per-view web sites that are increasingly run by the photographers and the models themselves. "

18 Billion dollars a year.

62 posted on 09/04/2002 7:46:01 AM PDT by elfman2
[ Post Reply | Private Reply | To 41 | View Replies]

To: monkeyshine
I think they would make more money, not less.

They have absolutely no production costs. No CD's, No cases, no labels, no shipping to the stores.

Sure, they would still come out with new CD's for the people who didn't want to fool with downloading.

I could probably sit down and come up with a 1000 songs that I would pay for. Look at what out of print CD's are going for on eBay. I recently paid $80 for a CD I've been looking for. And there are a lot of other people doing the same thing. Look at what Traveling Wilbury CD's are going for.

Every old song the record companies sold like this would be pure profit. Profit they're not making now.
63 posted on 09/04/2002 7:49:48 AM PDT by chaosagent
[ Post Reply | Private Reply | To 42 | View Replies]

To: chaosagent
Look at what Traveling Wilbury CD's are going for.

What are they going for? I've got 2 of them, and haven't listened to either for years.

64 posted on 09/04/2002 8:01:57 AM PDT by monkeyshine
[ Post Reply | Private Reply | To 63 | View Replies]

To: Nick Danger
Wow, Nick. I just read your little mini-essay on the state of, and future of, internet commerce and I love it! It's spot on!

Now if I can just figure out how to make a buck off of it...

Thanks Nick. And VIVA FR!

65 posted on 09/04/2002 8:11:27 AM PDT by Siegfried
[ Post Reply | Private Reply | To 41 | View Replies]

To: monkeyshine
The CD's easily go for $30-40.
66 posted on 09/04/2002 8:19:28 AM PDT by chaosagent
[ Post Reply | Private Reply | To 64 | View Replies]

To: savedbygrace
    Cool trick for a film that is still being edited.

Still being edited... yes, of course. I'll add that to my disclaimer.

    You didn't pay for it, did you?

For a film that's still being edited?

67 posted on 09/04/2002 8:57:29 AM PDT by Jeff Chandler
[ Post Reply | Private Reply | To 59 | View Replies]

To: Nephi
Nice article, clear information, Thanks
68 posted on 09/04/2002 8:57:56 AM PDT by Sarah
[ Post Reply | Private Reply | To 27 | View Replies]

To: chance33_98
KaZaA rolls on, swapping files unencumbered. No US court, no court anywhere in the world, can stem the tide.

Napster was just unlucky enough to be the first to get noticed by the big money special interests whose business plans require a cessation of the advance of technology. It is a fool's project.

Copyright law in its present form does not reflect reality. The Internet permanently devalues almost all copyrightable material because distribution is nearly cost-free. The RIAA and huge portions of the big entertainment companies have become unnecessary.

69 posted on 09/04/2002 9:08:50 AM PDT by beckett
[ Post Reply | Private Reply | To 1 | View Replies]

To: PianoMan
Song writters get screwed by file sharing...I am amazed that there are anti-capitalist "art welfare" recipients at FR who support file sharing....stealing is stealing, theft is theft....the liberal socialist are the ones who USUALLY promote the freebie handout mentality and the they-are-rich-so-lets-screw-em type of thinking....I cannot stand Eniem, but the so called art is HIS and the song writters, not a art-welfare-I-want-it-for-free-because-they-have-money type sitting on his butt in front of his computer who put NO SWEAT and blood and RISKED capital into the making of the product.
70 posted on 09/04/2002 9:12:39 AM PDT by Moby Grape
[ Post Reply | Private Reply | To 4 | View Replies]

To: Nick Danger
Excellent analysis of the situation.

Virtually every computer sold today has a CD-burner. Within a year or two, penetration will be such that just about everybody has one. As well, broadband is finally beginning to reach critical mass. Once these two technologies come together on a large scale - look out RIAA!

Wait until everybody realizes that they can buy a stack of 100 blank CDs for the price of a single pre-recorded CD offered by the recording industry!

I believe that many recording acts in the near future will bypass record companies altogether and will offer their music on their own websites. (Some are already doing that.) People will download the music and burn their own CDs. For a small fee (probably around $3-5), the recording artist will mail out artwork and liner notes so that the consumer at home can "complete" the package. This will be how the recording artists will get paid. Or maybe the recording artist will offer 96bps or 128bps for free download (where the consumer can sample) but will charge a nominal fee for higher "CD" quality MP3s or even .WAV files which offer the best quality of all.

There are plenty of ways a recording artist can generate some significant revenues, bypassing the recording industry completely. Sure, there will be many consumers who will download the music and not pay for it. The music will even become available on the major file-sharing sites like WinMX and Kaaza. But even if just 10% of those downloading the music pay for it, the recording artists stand to make far more than what they were getting from the record companies! In many cases, recording artists would actually owe money to their record label after all the "expenses" were deducted. Only the superstar acts ever made big money with record contracts. All the others depended on concert revenue. This way, even "niche" recording acts can make a decent living by offering their music online. Much less overhead and much greater profit margin. A niche band that used to sell 50,000 to 100,000 copies per album with the record labels was considered a "money-loser" and a liability by their record labels. Now they can be fully independent and make a much better living for themselves. They will probably even become millionaires.

The recording industry had a prime opportunity to get a foothold early on with file-sharing. Had they decided to work with Napster (or even bought it outright) and used it as a tool to shift their distribution channels from physical media to electronic distribution, they might have had a chance to survive long-term. As it stands right now, they are like Wang back in 1982 - they are already obsolete and just don't know it yet. For those that don't remember Wang, they were a company that made word processors and despite the introduction of the PC in 1981, they kept on making those word processors, thinking that people would keep buying them.

The declining CD sales that the recording industry is talking about is only just beginning. If they think it is bad now, just wait. The only thing the recording industry can do to save themselves right now is to drastically lower the price of their CDs and right now, it looks like they are too stubborn to do that.

I would rather pay the recording artist a few bucks direct and burn my own CD then to pay $15 for one in a store. But if they were $5 in the store, I would certainly buy a lot more of them and do a lot less burning.

71 posted on 09/04/2002 9:19:53 AM PDT by SamAdams76
[ Post Reply | Private Reply | To 41 | View Replies]

To: Sarah
Just a small detail....How do you propose artists, producers and promoters be remunerated for their efforts?

Well, they could sell T-Shirts for $50.00 at their concerts.

Or maybe if they took a little less for a plastic disc that cost about fifty cents to produce and they sell for twenty bucks, people would be less prone to swap.

On The Other Hand....Recording artist, producers, agents and record companies need to make as much as they can since I am starting a class action suit against them all for ruining my hearing.

Hey! If it works for cigs, hot coffee, fast food, etc. WHY NOT!?!

72 posted on 09/04/2002 9:27:56 AM PDT by N. Theknow
[ Post Reply | Private Reply | To 8 | View Replies]

To: peteram
So, if everyone is burning their own CD's with music they are downloading, where would the artist earn his/her/their money (besides live appearances)?

Excellent question. Only a few people seem to be considering this very deeply (including a few interesting posts above). But one thing that ought to be fairly clear right now is that the old economic model is simply unsustainable.

There was an era before recorded music, and an era of recorded music before the recording industry as we know it today existed. In those eras musicians typically earned their money by performing. When they stopped performing, they stopped earning money. In some sense, we are probably headed back to that model.

Future attempts to defend individual performances as "intellectual property" are doomed to fail. The ability to record and distribute has become dirt cheap. Consequently the availability of the technology to do this is becoming universal. It will undoubtedly shake up the market, perhaps leading to increased emphasis on live performance rather than studio recording.

73 posted on 09/04/2002 9:31:09 AM PDT by Snuffington
[ Post Reply | Private Reply | To 49 | View Replies]

To: Snuffington
Expect concert prices to increase accordingly.

Another item of note is the mass sypathy for the multitude of artists who sign bad long term deals with companies then get little to show for their efforts. Fans are tired of seeing the companies get the money they think they are spending on NSync, BSB, Mariah, even Aerosmith, The Dixie Chicks, and many many more. The young fan is taking the attitude: if (so-and-so) is not getting paid anyway, why do I care if I steal it?

Finally: the real draw of online trading is not in albums, but in singles. People are tired of paying $16 to get 2 or 3 songs they actually like. The music industry has ignored this complaint for years, but therein lies the solution. Go back to the days of 45s and license each song, not the entire album, and sell accordingly - I remember a brand new single was only $1 or $1.50. I think people would pay $2 or $3 per song if they could cut their own CD right inside a Tower (et al) records - and if it's licensed properly then everyone would still get paid.

74 posted on 09/04/2002 9:52:56 AM PDT by BlueNgold
[ Post Reply | Private Reply | To 73 | View Replies]

To: July 4th
http://www.blubster.com
The new napster
no spyware
75 posted on 09/04/2002 12:53:04 PM PDT by Bolivar
[ Post Reply | Private Reply | To 18 | View Replies]

To: chance33_98
The only thing on Napster's site today is this graphic:


76 posted on 09/04/2002 12:55:07 PM PDT by mhking
[ Post Reply | Private Reply | To 1 | View Replies]

To: Nick Danger
Re: Your post #41... That is the best analysis that I have ever seen of the future of online music. Your comparisons to what is happening in the software and smut industries is right on target.

Excellent post.

77 posted on 09/04/2002 1:00:52 PM PDT by TheEngineer
[ Post Reply | Private Reply | To 41 | View Replies]

To: chnsmok
What's Kazaa Lite?
78 posted on 09/04/2002 2:07:43 PM PDT by jjm2111
[ Post Reply | Private Reply | To 7 | View Replies]

To: Jeff Chandler
ourselves into watching a pirated copy of "Lord of the Rings-The Two Towers"!

Where can I find this? No moral problems here! (I'll prolly watch it again in the theatre in dec. anyway).
79 posted on 09/04/2002 2:14:07 PM PDT by jjm2111
[ Post Reply | Private Reply | To 45 | View Replies]

To: Bolivar
Thanks, I was about to download Kazaa and then read a warning in a review saying that it was loaded with spyware.
80 posted on 09/04/2002 3:09:30 PM PDT by ganesha
[ Post Reply | Private Reply | To 75 | View Replies]


Navigation: use the links below to view more comments.
first previous 1-20 ... 41-6061-8081-100101-112 next last

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson