Napster hopes offer will stave off demise

Photo courtesy of Napster

From Rusty Dornin
CNN Correspondent

(CNN) -- While a San Francisco federal court decides Napster Inc.'s fate and possible demise, the Internet song-swapping service has taken its case to the court of public opinion.

At a press conference in San Francisco, Napster executives offered record companies $1 billion over the next five years.

How would Napster come up with the money? They'd become a subscription service, and users would have to pay a nominal fee.

This move makes sense to many musicians.

"It does to me but I don't know if it will happen with that organization. But that's the future," said pop star Melissa Etheridge.

ALSO Have more to say on this topic? E-mail us at thedot@cnn.com    VIDEO CNN's Rusty Dornin has more on the reaction to Napster saying it is willing pay $1 billion to record companies Play video (QuickTime, Real or Windows Media)     QUICKVOTE What should happen to Napster? Napster should work with the recording industry, with users paying a subscription fee It should be shut down for copyright infringement The site should stay as is I don't know View Results

Ashley Angel of O-Town agreed, saying, "I think if Napster can be regulated I think it can be a very good positive thing."

Internet research group Jupiter Communications predicts that online digital music subscriptions will be a big business, grossing as much as $980 million by 2005.

Recording industry not impressed

However, Napster's very public offer didn't impress the recording industry, which would only release a statement.

Hillary Rosen, CEO of the Recording Industry Association of America, wrote:

"Our member plaintiffs have always said that they stand ready and willing to meet individually with you to discuss future licenses. This path would be more productive than trying to engage in business negotiations through the media."

So was this a last ditch effort to save Napster from oblivion? "It's an attempt to save Napster absolutely...and what we're trying to do is say to the record industry is that we've been saying these things in private to you for nine months -- now we're saying these things in public," said Hank Barry, CEO of Napster.

German music giant Bertelsmann and a small independent record label, TVT Records, have backed off the lawsuit and signed on with Napster. They encouraged other labels to do the same.

"I think it would be a tragedy not to meet the consumer halfway here and recognize that this community is a very potent force," said Steve Gottlieb, president and founder of TVT Records.

Napster may be a force, but it is one the recording industry wants to reckon with in court.

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