News Blog

(Credit: Napster)

Probably the biggest piece of digital music news to come out of CES 2008 was that Napster was planning to offer its complete catalog of more than 6 million tracks in the unprotected MP3 format.

On Tuesday, with the launch of version 4.5 of the software and store, that announcement becomes a reality. Although digital music stores such as eMusic, Amazon MP3, and even Napster itself already had MP3s on offer before this point, the collective catalogs of all three didn't even come near the volume of tracks you can find in the entire Napster library. All four major labels and thousands of indies are represented in the store, and every track will be available at the standard 99 cent price point.

Napster's Web-based store with the online media player window open.

(Credit: Napster)

In addition, Napster's Web-based store, which is all that is required for MP3 purchases and downloads, is compatible with every operating system. And--of course--the MP3s can be played on any MP3 player, portable video player, or music cell phone. Currently, 95 percent of the catalog is encoded at 256Kbps, which is reasonably high-quality for an MP3, and each track comes with hi-resolution album art (at least 1,000x1,000 pixels). Although Napster has quite an international presence, the MP3 store will only be available to U.S. residents for the time being.

Napster will continue to offer its online and To Go subscription services for $12.95 or $14.95 per month, respectively. The music associated with a subscription will remain in the protected WMA format with the time-out capability.

The company did make some improvements to its online interface. It now features a "liquid layout," which resizes everything within both the store and media player windows when you adjust the size of either window. Napster has also improved its download management system so that users can better view what has been purchased already and whether it was ever downloaded after the purchase.

Sadly, because of label restrictions, Napster will not be offering any type of trade program for customers who have a library of DRM-protected WMA files that they purchased a la carte. However, the licenses on those files will continue to be supported by the service, so no need to worry about a repeat of the MSN Music scandal. At least not for now.

On a day when we learn an iPod apparently threw off sparks in Japan, generating nervous memories of exploding Dell laptops, let's take time to report the obvious: The people who run the recording industry are very often not very bright.

Blender.com has published an entertaining list of the record industry's 20 biggest, dumbest, and stunningly dense moments. Topping that list, not surprisingly, is the industry's jihad against Napster. To refresh your memories: Shawn Fanning's dandy innovation allowed people to share millions of songs over the Internet. But there was a problem: They weren't paying for it, and the record industry sued the pants off Napster and eventually, many would argue, killed it in its original form.

These guys or the Tremeloes? You decide.

(Credit: Apple Corps.)

Two other tech-related fiascos, the ham-handed piracy suit brought against single mom Jammie Thomas (No. 5 on Blender's list) and Sony BMG's copy-protection rootkit scandal (logging in at No. 9), also made the list. It's fair to say Blender believes the industry has had a tin ear when it comes to new technology. These are people, after all, who thought 8-tracks were a great idea.

But before we roundly mock the recording industry, about those iPods: A Reuters report out of Japan said one of Apple's iPod Nanos emitted sparks while being recharged. Now as a frequent carrier of an iPod Nano, this certainly got my attention. Reuters says Apple is looking into what happened, and there's no indication so far that this is any sort of widespread problem. But it's Apple, so people will get worked up about this no matter how isolated it may turn out to be. My colleague Tom Krazit is looking into it, and will let you know if there's more to this on his One More Thing blog. Reuben Lee of CNET Asia has also posted a short take on it on Crave.

Now about those brain-dead moments: That the Napster fracas tops the Blender list says everything about the state of the recording industry. This, according to Blender, was an even bigger gaffe than a Decca Record A&R exec's failure to sign the Beatles in the early 1960s. Instead, he signed a slightly lesser known act, Brian Poole and the Tremeloes.

Who can forget Lars Ulrich, the drummer for the heavy metal band Metallica, waving a list of Napster users outside Napster's Silicon Valley offices? As anyone who has seen the hilarious Metallica documentary Some Kind of Monster can attest, Lars and his hard-charging gang are savvy enough businessmen and good musicians if you're into that sort of thing; they're also a collection of petulant, absurdly wealthy, man-children. They are Spinal Tap in real life--bickering, leaning on a corporate psychologist-type, and taking themselves waaaaay too seriously as they struggle to produce another megahit album of terribly loud music.

The movie, unfortunately, only briefly touches on the Napster incident. But it makes it clear that it had a big enough impact on the band that they decided to keep their shrink around a little while longer to help them deal with the fallout.

We shouldn't be shocked that Metallica maybe didn't understand what Napster represented: A profound change in how people consume music. But we should be a little disappointed in the industry execs who should have been smarter and still don't seem to be. As Blender correctly points out, the industry went the legal route, rather than recognizing this was a game-changing technology that they'd need to figure out how to work with. Now there are a gazillion Napsters, all exchanging music people used to pay for.

I won't make apologies for people who engage in wholesale pirating of any sort of content. I also won't make excuses for an industry that refuses to accept that their old business model is broken. All the lawsuits in the world won't change that.

It's easy to get on your high horse when it comes to the record labels, of course. But as I nervously eye my Nano recharging on my desk, sans sparks or other acts of spontaneous combustion, I can say one thing with absolute certainty: when suing the customers is your best answer to changing technology, you have problems.

So what happened to all the settlement money that Napster and Kazaa were forced to pay the record labels?

That's the question some music artists are asking, according to a story that appeared Wednesday in The New York Post.

The Post quoted two talent managers who said that artists have yet to see their cut of the Napster-Kazaa settlements. This isn't pocket change we're talking here. Napster paid $270 million to settle its copyright infringement case and . Some on the talent side suspect the top four record companies of foot dragging or playing "hide and seek" with the cash.

If nothing else, the controversy illuminates the degree of distrust that exists between artists and the labels. As CD sales continue to shrink, look for more squabbling between them.

But for its part, Warner Music Group says it isn't playing games.

Warner's share from Napster was $110 million, according to documents it filed with the government last April. Warner said at the time that "we will be sharing (the money) with our artists and songwriters."

In June, Warner received an additional $52 million related to the legal cases, according to the documents. The label issued this statement on Thursday: "WMG is sharing the Napster settlement with its recording artists and songwriters and at this stage nearly all settlement monies have been disbursed."

Representatives from EMI and Universal Music Group say they also intend to share the settlement with artists. Sony BMG Music Entertainment was a financial backer of Napster and ended up paying big money to the other three music companies. Sony BMG did, however, receive a share of the Kazaa settlement.

Jay Rosenthal, legal counsel for the Recording Artists Coalition, a group representing the interests of music artists said that the labels have told him that they are trying to decide how to divvy up the money and have been sending payments for a while. He's skeptical to say the least.

"If anything has been paid so far, it has been minimal," Rosenthal said. "The labels are always going to try to hide the money or use some self-serving formula when they finally get around to paying the artists."

But a source within the music industry said that the talent managers aren't looking at the realities.

First, who could deny that the Napster and Kazaa cases, which lasted years, didn't run up massive legal bills, the source asked. Also consider the "inordinate amount of time" it takes to collect the money and figure out which artist's music was infringed, the source said. He added that the labels must split the money between scores of performers.

"The lawyers get their cut first," said the source. "Then the money has to be split among hundreds of different artists at each of the labels."

After all is said in done, according to the source, the process takes a long time and "nobody gets rich from this."

Rosenthal said he has heard all this before.

"The (labels) are certainly going to claim that the legal costs have eaten up the proceeds," Rosenthal said. "But I don't believe that is the case."

Social network, Imeem, has acquired struggling music-licensing company, Snocap, the company cofounded by Shawn Fanning of Napster fame, according to a published report

TechCrunch, citing an unnamed source, reported that the deal is being finalized this week.

Snocap offers to handle copyright and music licensing for musicians and also powers embeddable download stores that artists can place on any site. From these digital-music vending machines, musicians sell their own music.

In October, Snocap CEO Rusty Rueff told CNET News.com that the company had cut its staff from 56 to 26.

The $100 ZoneBridge enhances the wireless connectivity of a Sonos setup.

(Credit: Sonos)

Sonos today issued a flurry of announcements that will further augment the appeal of its Digital Music System: compatibility with two additional premium music subscription services--Best Buy's Digital Music Store (BBDMS) and the revamped Napster; a new software update that adds a handful of useful features, including search; and confirmation of the ZoneBridge BR100 networking accessory. The details, in brief: ... Read more

Click me to check out the new Napster interface.

Other than its first reported quarter of positive cash flow, Napster has enjoyed a relatively unremarkable year--at least on the surface. It is now apparent, however, that plenty of tinkering has been going on in the background.

The company on Tuesday announced a fairly significant redesign to its music service and software. The new Napster, version 4, is lighter and a bit simpler--and it definitely appears to take some cues from RealNetworks' Rhapsody.

Of particular note are the launch of a Web-based version of the service, which will enable Mac and Linux users to join in the fun, and the addition of the Automix feature, a new music discovery tool.

I could go on to list all the details in long and boring fashion, but a picture (actually, 22 pictures) is worth a thousand words--wouldn't you agree? Check out our slide show for an up-close and personal look at Napster 4.0.

Snocap's leadership, from left to right: Ali Aydar, chief operating officer; co-founders Jordan Mendelson and Shawn Fanning.

(Credit: Snocap)

UPDATE (12:15 p.m. PDT Friday): CNET News.com interviewed Snocap CEO Rusty Rueff after this story was published. He says the company's music stores just weren't catching on fast enough and its time to sell the company. You can read what he has to say in this story.

Snocap, the music-licensing company best known for being the follow-up act of Napster founder Shawn Fanning, has cut its staff by 60 percent, a spokeswoman for the company said Thursday evening.

Founded in 2002 by Fanning, Jordan Mendelson, and Ron Conway, Snocap started out trying to provide digital-music licensing, but has moved into new areas, such as setting up online stores for musicians.

Thanks in large part to Fanning's Napster fame, the San Francisco-based company attracted a lot of attention when it launched, but has seen its profile steadily diminish in recent years.

The blog Valleywag, which first reported the story, also said the company is for sale.

"Snocap has received interest from several companies and is pursuing that," said Susan Celia Swan, a company representative.

The idea behind Snocap was to help sell music legally online. The company handled the licensing and copyright issues and anybody wishing to sell music from a Web site need only have Snocap set them up with a digital music store that can be embedded into any site.

The service allows artists to sell music directly to consumers and even set their own prices.

But many industry insiders were skeptical about Snocap's chances from the start. Fanning, who founded pioneering file-sharing service Napster, was public enemy No.1 in the sector for years. Skeptics questioned whether music executives would do business with him.

This time Fanning was holding a white flag, however. He declared that Snocap was all about empowering artists and the legal sale of music.

In September 2006, Snocap announced a deal to sell music on MySpace.com. The service allowed bands of any size to sell music for whatever price they wanted. Snocap and MySpace would share the small fee that they charged. It was MySpace's first official e-commerce venture.

Snocap said that its MyStores have attracted more than 175,000 registered consumers, and over 80,000 artists have created their own storefronts.

The number of registered consumers seems shockingly low when one considers that MySpace is supposed to have over 100 million registered users. I know that there are far less active monthly users on MySpace but even if there are 10 million, one would think that Snocap should have a larger profile.

In September, MyStores received nearly 20 million unique visitors and more than 140 million monthly impressions. What's important here is that this is an e-commerce play but the company doesn't reveal anything about sales.