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Technology Stocks : MUSIC STOCKS: HIGH-TECH AND INTERNET- Winners and losers.

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To: Rande Is who wrote (139)3/3/2001 8:34:01 AM
From: Rande Is  Read Replies (1) of 179
 
Another nail in Napsters coffin!!

Napster Plans Screening System

Updated: Sat, Mar 03 03:15 AM EST

By RON HARRIS, Associated Press Writer


SAN FRANCISCO (AP) - In a move to pre-empt a
court-ordered shutdown, Napster Inc. says it will
deploy a new screening system to stop the free
trade of thousands of copyright songs.

Napster's plan to bring the software online this
weekend came as the company pleaded with a
judge Friday to keep its music-swapping service
alive.

Attorney David Boies said the screening system
would block access to 1 million music files. He and
Napster chief executive Hank Barry left it unclear
whether the number represented different songs
or spelling variations involving a much smaller
number of songs.

The move amounted to a concession that Napster's days were over as
an online clearinghouse for the free trade in copyright tunes. The
company said it would offer membership-based swapping for a fee by
July 1 and pay copyright holders royalty fees.

The recording industry, which provided Napster with a list of 5,600 song
titles it wanted blocked, said its plan wasn't aggressive enough.

Music industry attorney Russell Frackman said a far greater number of
songs should be screened out, including recordings not yet released to
the public.

Hilary Rosen, president of the Recording
Industry Association of America, said she will
take Napster on its word that it is trying to
develop a method to comply with copyright
infringement issues.

"We think that the screening technology has
the potential to be effective, but we'll see," Rosen said.

The software will be smart enough to block searches of name
variations, such as "Bing's Christmas" for Bing Crosby's "White
Christmas," or misspellings such as "Metalica" for "Metallica," Napster
officials said.

But some experts wondered how long it would take before users find a
workaround.

"What the well-intentioned mind can invent, the
not-well-intentioned mind can destroy," said Robert Schwartz, a lawyer
who has represented movie and television studios in copyright cases.

If the screening system works, however, frustrated Napster users can
go elsewhere - to similar servers not under the control of the company
or the courts, and file-sharing systems that use no central servers.

Where all of this will leave Napster is unknown. Its users downloaded
with a vengeance as Friday's hearing began. More than 8,500 people
were sharing more than 1.7 million files through just one of Napster's
more than 50 servers.

The hearing was the result of a decision from the 9th U.S. Circuit Court
of Appeals, which ordered U.S. District Judge Marilyn Hall Patel to
rewrite her earlier order that essentially shut the company down. The
appeals court ordered her to come up with a much more limited way
Napster can survive.

Specifically, Patel must find a way for Napster to block pirated songs
without limiting the free speech rights of computer users trading other
music.

Napster last week offered to settle the lawsuit brought by the
recording industry for $1 billion in exchange for a 40 percent cut of
online music sales. The offer was rejected by the recording industry.

Last fall, German media giant Bertelsmann AG, which owns the BMG
label, partnered with Napster and said it would fund the development of
a subscription-based service.

None of its competitors has joined in and all the major labels are
developing online music distribution businesses of their own, even as
other ways of getting free music are sprouting up.

Napster's popularity exploded in 1999 after founder Shawn Fanning
released software making it easy for personal computer users to locate
and trade songs stored as computer files in the MP3 format, which
compresses digital recordings without sacrificing quality.

The five largest record labels - Sony, Warner, BMG, EMI and Universal -
quickly sued, saying Napster could rob them of billions of dollars in
profits.

James Grady, an analyst with Giga Information Group, said the
screening technology coming this weekend from Napster is a valiant
effort, but perhaps comes too late.

"I really think that this is Napster's opportunity to show that they are
trustworthy," Grady said. "The question is do they want to take
advantage of that, and will they be able to?"

---

On the Net:

Napster: napster.com

Recording Industry: riaa.com

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