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Posted by Inevitiwebly | 12.5.2000

Apparently no longer willing to wait for the Napster controversy to die down, has established a pricing policy that asks users who stream its music using the service to pay up. Will they?

Under the terms of the new pricing policy set by the company this morning, users with more than 20 cds in their accounts will have to pay an annual fee of $50 to access them - a much higher figure than had been expected. CDs which were added to user accounts before the policy change went into effect this morning are grandfathered.

Visitors to the site will still be able to try out the service for free, as long as they stick to the twenty cd limit. Subscribers to the service will be allowed to store up to 500 cds in their lockers.

The decision to ask users to pay represents a major policy shift for the San Diego based company. Many observers had believed that would bide its time before imposing fees. Even though the company has been forced to pay nearly $200 million dollars in settlement fees stemming from the copyright suit filed by the labels, many thought it likely that would wait before making substantial changes.

With Napster and the other file-sharing networks still a very real threat - the move to an unfree service could easily alienate many potential customers in an environment where most consumers expect music on the Net to be free, just as it has been on in the past.

The decision to plough ahead despite the negative publicity the move will undoubtedly generate, may show that both and the major labels recognize that Napster isn't going away any time soon.

On the other hand, the decision may also be a precursor to another major development: the arrival of the label content has been waiting for since the site went into operation in 1998.

The agreements signed with the major record labels: EMI, Universal, BMG, Sony and Time Warner - give the company the right to use label content on the service.

The arrival of the majors on a large scale at will be a historic moment for digital music - as it will be for the Net itself. For years, the labels stuck to their guns - refusing to do anything more than dip a little toe into digital downloads and subscription services. As many people have pointed out, the arrival of Napster made continuing that policy untenable.

The labels refusal to participate for so long may have done more than just damaged reputations and strained relations with both fans and artists. The fight may well have damaged the Net economy as a whole over the last year - and who knows about these things - may even contributed in a way to the death of a good many dot coms.

As the amazing growth of the MP3 format over the last year suggests, few commodities are as suitable for digital delivery or as desirable as music. At a time when many people are questioning the very idea of e-commerce, its good to see a development that could potentially lead to a resurgence of the entertainment industry online and help boost the technology sector.

When you think about it, the implications for entertainment technology are overwhelmingly positive. Investors have been waiting for somebody to show them the way. Poll after poll has shown that users who download music for free on the Internet feel more than just a little guilty about taking music without paying.

A success for will be a tremendous vote of confidence, not just for Michael Robertson, but for business on the Net as a whole.

But will people respond to a service that allows them to both purchase and store the music they want - the music some of them want, anyway - online? There's no way of knowing for certain.

This much is certain however: when the majors arrive at people will have a choice - a choice that makes a lot more sense than label content scattered randomly around the web.

The move to a paid service is bound to create a violent reaction among the hundred thousand or so indie artists who call home - not to mention millions of fans who have discovered digital music using services like Napster.

It's likely some will say the decision to move to a fee-based service spells the death of the old The site which for a time gave struggling independent artists a chance to compete. The site which flaunted MP3 in front of the noses of the recording industry establishment for a long long time.

Perhaps understandably, many will respond with a raised middle finger. It will be a long time before they forget.

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