Napster's lame $1 billion offer

Napster has offered up a high-priced olive branch to the music industry--$1 billion to drop the copyright infringement lawsuit. But of course, it's just a massive publicity stunt, and the music industry isn't likely to grab that branch, as generous as it may sound.

After all, it's got more thorns than benefits; the reality is that the $50 million dollar licensing fee each record label would get once a year over five years under the Napster proposal is chump change. The industry rakes in $38.5 billion dollars annually, worldwide--and besides, money isn't the point. Who owns the copyright is, and the Napster pay-to-download plan doesn't address that.

Not to mention that the notion of the five major record labels agreeing on anything is about as likely as Osama Bin Laden, Dubya and Eminem going out for a beer.

"I think it would take a small miracle to get all five labels to agree to this," Gartner analyst P.J. McNealy said.

Public relations war under way
Hasn't Napster heard of the Secure Digital Music Initiative, the fledgling attempt by the music industry to create standards for digital delivery of music? Had the music industry held hands and worked together to handle the enormous threat file-sharing poses, they would have had more success with this effort.

Remember that Napster got a cash infusion from the music publisher Bertelsmann back in the fall, and that didn't sit well with the other big guns in the industry, who looked at that as sleeping with the enemy. (Of course, had they been smart, all of the music companies would have jumped in bed together and bought out Napster in the early days of the threat, instead of suing it; now the attention has garnered Napster so much publicity that its name is worth gold--even if the service wasn't worth a dime.)

So that leaves a public relations war. Napster holds press conference to offer deal; the Recording Industry Association of America says, "You've got to be joking"; Napster counters, "Nope, we're serious, this is a serious business model we're proposing."

And then you get statements issued by the likes of Universal Music Group, which said, "It is Napster's responsibility to come to the creative community with a legitimate business model and a system that protects our artists and copyrights. Nothing we have heard in the past and nothing we have heard today suggests they have yet been able to accomplish that task."

The end of Napster
The devil is in the details, and Napster has yet to provide any beyond said olive branch and the vagaries of a paid Napster service. A press release issued by the hired flacks who shield the Napster-ites from the press until they're ready to appear before it said, "Definitive pricing has not been set, but the model will have two tiers.

The model includes a 'Basic Membership' plan that would cost in the range of $2.95 to $4.95 per month with an as yet undermined limit on file transfers. The 'Premium Membership' will cost between $5.95 and $9.95 and will offer unlimited file transfers."

Are you ready to pay up, especially given this additional tidbit released yesterday? "The new Napster, slated to launch this summer, will be designed as a promotional service with fidelity limitations of 128 kbps and lower. Users will be asked to pay an additional fee in order to burn CDs and to transfer their music to portable devices."

Napster as you know it is soon to be dead, but the biggest shame is that it could have been saved, in some form or fashion, if only everyone had worked together in the early days. It's only going to further alienate the music fans from the industry, and the music industry from the fans.