March 27, 2002 7:15 AM PST

Napster's refrain: Still not ready

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Song-swapping company Napster says it is delaying the launch of its subscription service yet again, after running into serious snags in its settlement talks with the big record labels.

Originally slated to open its doors at the end of 2001, and then by the end of March, the new Napster is now indefinitely on hold.

In a message posted on its Web site, Napster said it is fighting not only for the simple right to use major label music in its new service but for the ability to let consumers do what they want with it.

"Basically, we want what you want--a wide, deep range of content and the ability to do what you want with your music," the message says. "We think that's worth fighting for, and we're willing to push back our launch until we have it."

All of the big subscription services, including those owned by the major labels, are seeking the ability to let consumers transfer songs to portable devices such as MP3 players and to "burn" the songs onto CDs. So far the major labels have been reluctant to give online services that power.

Without any revenue in sight, Napster's future is looking increasingly clouded. The company went through a second round of layoffs several weeks ago and has halted most efforts to add new independent music to its service.

At the time of the layoffs, CEO Konrad Hilbers said German corporate giant Bertelsmann, a major investor in Napster, remained committed to funding the start-up through launch.

On Tuesday, a federal judge set a discovery timetable for the company's investigation into whether the big record labels have misused their copyrights in their online businesses. That came as part of the record labels' long-running copyright lawsuit, launched in December 1999.


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