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Napster Opens Beta Test of New Service

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Posted January 10, 2002 By Clint Boulton     Feedback

Formerly much reviled by the music industry, Napster seeks legitimacy with a pay-for subscription service; the firm also signed software providers Counterpoint Systems and Portal Software for security and billing applications, respectively.

What's that saying about not being able to keep a good thing down? Napster Inc. -- the embattled peer-to-peer file sharing concern shut out by the record industry and courts for gross copyright infringements -- is creeping its way back into the digital music limelight. But just how sweet it will be remains to be seen.

The company, which announced last year that it planned to enter the online music subscription service fray ( the yardstick of legitimacy, is how some pundits viewed it), is offering a beta version of its new service Thursday to some 20,000 people picked from the two million who professed their desire to take the acid test.

Some 110,000 tracks will be available free to the chosen music-hungry swappers, but unlike the overwhelmingly popular May 1999 incarnation of the service, none of it will come from major labels. Though no formal announcement has been made to the effect, it seems likely that Matador Records, representing indie artists such as Belle & Sebastian, Stephen Malkmus, and Yo La Tengo, will be featured. Napster also has licensing deals with indie labels Absolutely Kosher Records, Vitaminic and Amazing Grease, to name a few.

While news of the beta release was not so heavily publicized by the Redwood City, Calif. outfit, it did finally lock down two of its key software infrastructure providers, choosing a security system and billing software package from Counterpoint Systems and Cupertino, Calif.'s Portal Software Inc., respectively.

As one might guess, Counterpoint's software stays users from grifting music, which means Napster, artists, songwriters and various other rights holders should be compensated. Based in London, with some 75 employees, Counterpoint was founded by royalties pioneer Robert Katovsky and has installed some 1,500 packages since its inception in 1987. Counterpoint and Napster had working since March 2001 to customize Napster's new rights management system.

To ensure that payment to all parties goes swimmingly, Napster said it picked Portal Software's customer management and billing software solution, Infranet. Infranet features transactional real-time rating capabilities to help firms develop targeted pricing offerings for their members.

"With Portal's Infranet software we will be able to rapidly deploy our new membership service, deliver consumer friendly pricing plans, and track file-sharing activity to ensure accurate royalty payments," said Napster CEO Konrad Hilbers. "This technology is key to building our business and accurately compensating artists and other rights holders."

Such partnerships are all well and good for Napster, but it will need the wallop that the Big 5 record labels music catalogs can pack to win over enough customers to sustain itself. Hilbers has told anyone wo will listen that he expects to sign licensing deals with major labels soon. As of Thursday, he said the full version of Napster should launch sometime toward the end of the first quarter, pending major label support, of course.

Napster plans to charge subscribers $5 to $10 per month for 50 downloads. The firm, which hasn't made much noise since this past July, is playing catch-up with rival subscription services offered by pressplay,'s Rhapsody, and any firm that chooses to license MusicNet, the majority-owned RealNetworks Inc. platform.

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