Napster Becoming Legitimate Business
Posted by Heidi Chambers in Archive on October 2, 2000 at 8:10 AM

For the basics on what is happening with the Napster trial, click here.

In May of 2000, Hummer Winblad gave Napster Inc. $15 million in venture capital. The only catch was that Hank Barry, CEO of Napster, had to find a way to make the growing Internet company legitimate. Well, Mr. Barry is trying to do just that and here are two of the proposal ideas he's come up with.

First there is the idea of charging $4.95 for a monthly membership fee. This would generate $500 million a year in revenues for record companies and musicians. Not to mention, that idea would probably also keep Napster Inc. afloat which has some hefty legal bills to pay.

The second proposal is promoting the sale of CDs and downloadable songs. With Napster having over 20 million registered users, there is no doubt that some of them still buy CDs. That idea also includes giving Napster users Internet links and coupons that take them directly to the record companies and the musicians.

On the downside, Mr. Barry is concerned and frustrated with the fact that all of Napster's proposals have so far been shot-down. "We've made serious presentations, none of which have been accepted, which makes me think that it's not about money, it's about control," said Barry.

Napster is due in the 9th Circuit Court of Appeals today, beginning round two of its battle with the record industry.

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