Napster fears closure

Napster has warned that yesterday's court ruling that it must stop its users from swapping copyrighted music files would lead to the closure of the site and has vowed to continue fighting its wider legal battles with the music industry.

Yesterday, a US court of appeal ruled that Napster would be liable for copyright infringement if it continued to allow its millions of users to trade songs that are protected by copyright. But in a message to its members, Napster said its fight against several copyright infringement lawsuits waged by the big five recording companies was not yet over.

"We still have a lot of work to do, and we need your valuable help," reads a posting on its site. It urges its users to voice their feelings and write to the record companies in support of Napster.

In a statement, Napster chief executive, Hank Barry, said: "The court ruled on the basis of what it recognised was an incomplete record before it. While we respect the court's decision, we believe that Napster users are not copyright infringers and we will pursue every legal avenue to keep Napster operating."

But some analysts believe the judgement is the beginning of the end for Napster. PJ McNealy, an analyst at researcher Gartner, said: "Napster got nailed, plain and simple. This decision is a major step towards shutting down the service as it currently stands."

He warned that the decision would drive swapping of illegal music deeper underground.

Meanwhile, German entertainment giant Bertelsmann, which agreed to withdraw its lawsuit once Napster implements a fee-based subscription model, said it would continue to work with the music file download company to reach a "mutually satisfactory solution".

Andreas Schmidt, president and chief executive of Bertelsmann's ecommerce group, said: "File sharing is here to stay, and we will continue working to build a membership-based Napster service that will be supported by the music industry."

But McNealy does not believe that the support of Bertelsmann is enough. He added: "Napster expects to have a new service ready this summer, but that may not be too compelling with just BMG [Bertlesmann's music label] content on it."

The judgement has also riled one US consumer electronics industry association, which accused the appeals court of "ignoring the basic principles of copyright infringement".

The Consumer Electronics Association (CEA), which represents manufacturers of audio and video systems, liken the court decision to a similar one made in 1981, which ruled that video cassette recorders (VCRs) were illegal. That decision was later overturned by the Supreme Court.

CEA president and chief executive, Gary Shapiro, said: "If that decision had stood, we would have no VCR or movie rental to the detriment of Hollywood and consumers. We can only wonder if [the Napster ruling would mean that]technology and consumer access will be limited in the future."

See also:

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Napster, the website, was built as a central host for users wishing to swap MP3 music files. It has sparked an almighty legal battle over its legitamacy and has changed the way people obtain music.  01 May 2001

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Napster's future looks uncertain today after it emerged the music sharing service has failed to implement filters designed to prevent music files being illegally downloaded in breach of copyright agreements.  05 Mar 2001

Napster tries to buy time with new appeal

Napster has appealed against an injunction granted against it earlier this month, claiming it is too broad and violates its righs to free speech.  26 Feb 2001

Music industry rejects $1bn Napster offer

Napster's offer of $1bn over five years to the recording industry for a licence to distribute copyrighted material online, which was made late on Tuesday, has already been rejected by music industry hard-liners.  21 Feb 2001

Mediator appointed in Napster case

A US federal judge has appointed a mediator in the copyright dispute between the recording industry and the free web-based song swapping service, Napster.  20 Feb 2001

Napster moves to protect copyright

Bertelsmann, the German entertainment giant that is working with Napster, has announced that the music download company will use its digital copyright protection technology.  17 Feb 2001

Europe delivers copyright blow for Napster

Members of the European Parliament have voted to accept proposals, which ban Napster-like copying systems, just days after a US court rejected Napster's appeal in its fight against US music giants.  14 Feb 2001

Napster fate hangs in the balance

The immediate fate of Napster will be revealed on Monday evening UK time when a US court announces its decision on whether the online music file-sharing community should be effectively shut down.  12 Feb 2001

Tide turns in Napster's favour

The tide of opinion appears to be swinging in Napster's favour as large IT industry players jump on the music file-swapping bandwagon.  09 Nov 2000

Napster plans to charge users

Updated: Napster, the darling of the internet underground, plans to begin charging users for its service under a subscription-based model in partnership with German entertainment giant Bertelsmann.  01 Nov 2000

Napster survives latest court battle

Napster has survived its latest court battle after three US judges decided not to reinstate an injunction against the file sharing system that would have effectively closed it down.  03 Oct 2000

MP3: making sweet music on the net

The music industry has been shaken up by the emergence of MP3-based music websites such as Napster. Critics accuse them of facilitating piracy while advocates say they make it easier for unsigned musicians to have their music heard. We look at what all the fuss is about.  08 Aug 2000

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