August 1, 2003 1:37 PM PDT

Colleges explore legal Net music setups

Universities are considering ways to bring legal Internet jukeboxes to dorm rooms, including entering deals with commercial service providers that would see online music charges included alongside tuition fees or picked up by the schools themselves.

The effort is proceeding on several fronts, the most advanced charge being led by a committee of university and entertainment industry officials that is now collecting information from music services on behalf of individual colleges. Pilot projects could start as early as this fall, but insiders say that next year is more likely.

Recording industry officials and music services see the drive as a promising way to entice students away from free download services as well as a way to create a new, potentially significant source of income for the music industry and its nascent online efforts.

"We think it's very important that students are offered a legitimate alternative" to file-trading networks, said Cary Sherman, president of the Recording Industry Association of America. "We are hopeful that some music services and some universities will do some pilot projects, so they can gain some understanding of how that market might work."

The tentative contacts between the universities, entertainment companies and the online music distribution services could be the first in a series of steps that hold the possibility of transforming listening and consumption patterns as much as Napster once did.

With little money, a desire to hear as much music as possible and easy access to computers and fast network connections, university students provided a natural audience for the unbelievably rich music-swapping platforms of Napster and its successors. Critics of file-swapping services worried that the notion of paying for music would become an unheard-of proposition for an entire generation.

Backers of the new plans hope that giving students subsidized unlimited access to legal services will develop the habit of subscribing to music, shifting students' consumption patterns toward legal setups.

University officials have shorter-term goals as well. The rampant use of file-swapping services has flooded their internal networks with unpredictable data traffic and has exposed their students and even the institutions themselves to the potential of legal liability. Sponsoring legitimate services would remove those headaches, some university administrators believe.

"It is going to work," said Peter Fader, a professor at the University of Pennsylvania's Wharton School of Business who has been independently pushing administrators to pursue on-campus music services. "It's just a question of who does it first and best."

Many rivers to cross
But there are still considerable technological and cultural hurdles to clear before any such services can launch on campuses in the United States.

An early meeting with university officials, attended by representatives of most of the big music services such as Apple Computer's iTunes, Pressplay (now Napster), and Listen.com's Rhapsody, showed just how much of a gap in expectations had to be closed before any service could get off the ground.

According to attendees at the May meeting, university officials initially pressed for a campus service that would resemble a paid version of Kazaa, in which an unlimited number of MP3s could be downloaded by students. Existing versions of the paid services would not be enough to entice students away from Kazaa, the university representatives said.

The music services, along with a representative from Universal Music Group, explained that difficulties in licensing would make a Kazaa-style service impossible, however.

The outcome was an official Request for Information issued by the Joint Committee of the Higher Education and Entertainment Communities Technology Task Force, the group that oversees the effort. That document asked all the music services to outline how they believed an on-campus music service could work, with details on technology and potential business models.

Responses to that request were due in mid-July, but several of the music services are still preparing their final responses, sources say. No plans have been finalized, but people involved say ideas such as offering universities the equivalent of seat or per-user licenses to the music services are being discussed. The subscription fees could be borne by the universities themselves, or folded into students' annual fees so that the music still appeared to be free.

Such a plan could be controversial, however. Students--particularly at cash-strapped state schools that have had to raise fees dramatically in recent years--may object to having extra charges added to their bills for entertainment services they may or may not use.

A group of educators and administrators from Indiana University, Georgetown University and the University of Rochester will evaluate the proposals and prepare a report on the various technologies, but individual universities will be responsible for pursuing their own trial projects.

The potential of the market has also captured the attention of people in the technology community, outside the familiar cast of characters. Venture capital firm Battery Ventures has been looking at the college entertainment market closely, although partner Scott Tobin said the firm has not yet made any such investments.

All of the existing digital music services believe the college market is valuable.

"We think it is very important for legitimate digital-music services to have a presence on campus as part of the fight against digital piracy," said Seth Oster, a spokesman for the Napster service, which now includes the former Pressplay. "We've been working on it for a long time."

 

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