Report: Napster users lose that sharing feeling

LOS ANGELES, California -- The number of music files shared on Napster has plummeted in the past four months as the Internet song-swapping service continues to filter unauthorized content, the research firm Webnoize said Wednesday.

In fact, while users may wish to share files, Napster's deployment of technology has become so effective that it has virtually stymied the service altogether.

Webnoize said users of Napster's latest software, which incorporates file identification technology, had an average of 1.5 song files to share at any given time as of Wednesday, down from a peak of 220 songs in February.

The newest version of the once-phenomenally popular Napster software includes audio fingerprinting technology, developed by Relatable, which helps the company filter out copyrighted songs in order to comply with a court injunction.

The fingerprint technology, which identifies music based on its acoustical properties, has sharply diminished the number of songs that are available to share, said Webnoize.

Napster users initially attempted to circumvent any filtering by renaming songs with misspellings or obscure variations of the title. But fingerprint technology focuses on the digital properties of the audio track, making it more successful.

Number of users down too

Webnoize senior analyst Matt Bailey said the number of Napster users has also slid as the amount of available music has shrunk.

As of Wednesday, 320,000 users were logged into the system, compared to an average of 1.57 million simultaneous users at Napster's February peak, he said.

"By further reducing the music available through the current service, Napster has provided another nail in the coffin of the service consumers originally loved," said Bailey. "With little music available now, users continue to drift away from Napster."

Napster had no immediate comment on the findings, but has said that more content should be available on the service as a new software upgrade allows users to find songs that had been inadvertently blocked.

A Napster spokesman said the latest version of its software, known as 10.3 and which was released in a beta test version on Friday, should enable people to trade songs by independent or other artists which are not required to be blocked under terms of the court injunction.

WebNoize said the 10.3 version was among the applications it studied. Out of 320,000 logged onto the system, 80,000 users were connected using the new Napster application, it said.

Other services expected

The injunction against Napster is the result of a landmark copyright lawsuit filed by the world's big record labels -- including Vivendi Universal's Universal Music, Sony Music, Warner Music, EMI Group and Bertelsmann AG's BMG. (AOL Time Warner is the parent company of CNN.com.)

The labels first sued Napster in December 1999, claiming it was a haven for copyright piracy that would cost them billions of dollars in lost music sales.

Napster suffered another legal defeat this week when a federal appeals court rejected its request for a chance to challenge the crippling injunction.

On a more positive note for the company, Napster this month clinched a licensing deal with MusicNet -- a joint music subscription service between RealNetworks Inc. and BMG, EMI, and AOL Time Warner -- to carry these labels' music once it launches a new secure version, planned for later this summer.

Both EMI and Warner, however, issued statements on the day that deal was announced emphasizing they would not hand over their content to Napster until it had proven it had developed a secure system that pays royalties.

On Tuesday, Napster also signed more than 150 independent European labels to its new royalty-paying service to be launched this summer.

Reuters contributed to this report.