BMG to Purchase Napster

asv108 writes "In a dramatic reversal, Bertelsmann has agreed to purchase Napster's assets. Founder Shawn Fanning and CEO Konrad Hilbers are set to return to the company after announcing their resignation earlier this week."

Comments

Re:as usual, the music industry

[jglow]

wouldn't it be cheaper to pay someone to duplicate technologies in Napster rather than buying the name? There's gotta be other reasons behind this...

..Does anyone still care?

[Bowie J. Poag]

With OpenNAP, WinMX, and so many other P2P solutions available these days, does anyone really care about Napster? By today's standards, centralized hub-trading is sort of obsolete..

tar zxvf bag.tar.gz | cat cat

Cheers,

too late, and everyone knows it

[emkman]

napster changed everything, but when it died others stepped up to the plate. Sure the time in between sucked (aimster and early limewire, etc.) but now with the fastrack network and audiogalaxy, mp3s are pretty much as easy to get as before, sans the convienence of a centralized server. Secondly, napster is going to be using their new file format, and it has no chance of replacing mp3s. mp3s are popular and have a well saturated population on the net. Other formats have come out that are smaller in size at the same quality like wma(yeh i know its windows only) and ogg, but mp3s stay on top because of popularity and convience. Finally, since they have been bought by BMG, I assume there is going to be some sort monetary transaction involved. Are people willing to pay for music? Yes, I believe so, but only if it is really cheap (99 cents a song or so) and most of the money goes directly to the artists. I don't know what their plan is.
So basically, what Im saying is napster has a chance to get back in the game, but it won't succeed, and I think most people will agree.

The 3 E's

[El_Smack]

Sounds like another large corp. knows the 3 E's of competition: Embrace, Extend, Extinguish.

Re:The 3 E's

[Xacid]

That would make tons of sense if only napster was still the big dog, but a nice perspective to look at business none the less.

The Benefit to BMG

[Kraegar]

Is that they now have the Napstar name. When you mention "MP3" or "Music Online" the majority of sheep think of Napster. So now a major corporation (one of those that oppressed Napster to the point of death) now owns that name.

Any publicity is good publicity...

And the whole lawsuit thing was a whole lot of publicity where Napster was seen as the underdog by most people. Now BMG not only owns Napster, but owns that image they helped to create.

What will they do with it? I dunno, but you can bet it will involve them trying to make a profit. Don't go lookin for freebies.

Why did they buy Napster

[Target Drone]

Bertelsmann has since spent millions of dollars to prop up Napster

...

Bertelsmann will pay $8 million to Napster's creditors to acquire the company's assets. The transaction opens the door for Napster to file for Chapter 11 bankruptcy protection, according to sources close to the deal.

Seems like an awful lot of money to pay for a company since

• The software, while innovative will probably need an almost complete rewrite when they go to a new legit way of distributing music
• All of their customers have gone over to Kaza, Gnutella, etc.
• The name is now synonymous with illegal music. Although maybe they think it is worth something.
• The company still needs to file for bankruptcy protection.

So why are they paying so much for a company who's net worth ranks right up there with Enron? Is it?

1. They're a few fruit loops short of a box
2. They are buying the company just to make sure Napster doesn't somehow get going again
3. Napster has technology that can be patented
4. They know something we don't
5. All of the above

Re:Legitimacy, that's why.

[manobes]

Here's the problem as I see it.

People aren't attached to music labels. Nobody is exclusive to a certianly record label (i.e. I only buy Sony). This is a huge problem for label sponsored download sites.

While I concur with your point that nobodys going to mind paying $5/year to use BMG/Napster, they aren't going to want to do the same form Sony/Napsterclone, Universial/Napsterclone, etc. It's not just the price, it's the hassle. You've got to fill out a separte signup form for each one, and each has a different UI, different media format, different copying policy etc.

CD stores are successful becuase they aren't label specific, that's why Napster was successfull too. You could get anything you wanted there. If all they carry in the future is BMG music, then what's the point?

Re:Napster's assets?

[PepsiProgrammer]

This is probably the largest source of income napster has ever seen, rather ironic that its comming from their biggest enemy at one time. A modernized napster would be nice, but somehow i dont see bmg sponsoring a true free filesharing app.

Retro-Napster

[WEFUNK]

Napster as we know it is dead.

The recording industry as we know it (certainly the distribution side) is probably heading that way too.

We can guess, but no one really knows what the future holds for media production and distribution -- lot's of ideas for business models and cultural shifts - but no one really has a clue what's going to stick.

But everyone and their grandmother knows the name Napster and what it stands for, and there is already a certain amount of nostalgia for the first breakthough P2P music service and probably always will be since they did come first.

BMG is probably just hedging their bets.

Their best move might be to buy the Napster "assets" -- just the name and history really, then just hold on to it for a while so they don't tarnish the "brand".

Maybe P2P, ripping, and burning will just go away with some breakthrough copy protection -- I'm certainly not betting on it and they probably aren't either. Like everybody else in the recording industry, they'll kick and scream and try to hold on to their tenuous historical position while also experimenting with various on-line ventures - most of which will be doomed to mixed results and outright failure.

Once the cards really start to fall (along with many of the established players who won't accept drastically lower margins and/or different revenue sources) and a more stable model is reached, BMG could then rebrand the best product or service they've developed or adopted as the "New Napster(tm)" to help save whatever value their stock might still have.

Branding certainly isn't what is once was, but for an aging multi-billion dollar conglomerate, throwing down a few million is nothing if they can one day claim to be the first player in whatever new industry paradigm emerges and hopefully evoke a little nostagia while they're at it.

"Remember the first time you used Napster...?"

Re:as usual, the music industry

[zCyl]

wouldn't it be cheaper to pay someone to duplicate technologies in Napster rather than buying the name?

Welcome to postmodernism. Names are worth far far more than technologies. Do you think McDonalds has some magic way to make burgers and fries better than anybody else can?