Napster business partner Bertelsmann AG said Monday the Internet music site will launch an expected subscription-based service by June or July.
“We carried out market research among 20,000 Napster users,” said Bertelsmann AG Chairman Thomas Middelhoff, speaking at the World Economic Forum in Davos, Switzerland. “The willingness to pay is given.”
Bertelsmann, which signed a cooperation deal with Napster last October, is working with the music site and the music industry to better legitimatize music distribution on the Internet. A number of music companies have sues Napster in the past year over copyright infringement, but many of those companies have dropped their suit in recent months and have become ‘partners’ in the proposed new venture. Others, such as Sony, Warner Music, Universal Music and EMI are in talks at present with Bertelsmann to play a role in Napster.
Many other music companies remain at odds with the Napster concept, saying it costs them valuable royalties for the artists and the recording companies.
The switch to a fee-based service is a major gamble for Napster. The company runs the risk of losing its users to other online companies that continue to provide peer-to-peer music exchange at no charge. A survey of 20,000 Napster users conducted in December by Webnoize Inc. showed that a large majority are willing to pay up to US$15 a month for the music download service. Napster has yet to set a price for its service.