Music download sites benefit from Napster

By : |September 29, 2000 0

NEW YORK: While song-swapping firm Napster Inc.’s fate lies in the hands of a landmark copyright court battle, many file-sharing client and streaming media sites are benefiting from the much-publicised event, Jupiter Media Metrix’s AdRelevance said in a report on Thursday.

Napster has asked an appeals court to overturn a federal judge’s July order that called for the company to stop users from trading copyrighted songs, which would in effect shut it down. Digital music and copyright issues have been in the limelight lately. Earlier this month a federal judge said online music provider Inc. had wilfully violated copyrights and awarded Seagram Co. Ltd.’s Universal Music damages from $118 million to $250 million.

Streaming media and music download sites, which allow users to download compressed music files, watch videos, and listen to streaming radio broadcasts, have seen an increase in user traffic and advertising revenue amid the battle between recording labels and companies like Napster and

In the week following the July 26 Napster ruling, user traffic to Internet music sites rose by 22 per cent, the report found. A few advertisers have realised the potential in the Napster case, and as a result have bolstered revenue on ad-supporting Internet music sites, according to the report.

The resulting increase in traffic numbers to digital music sites prompted regular advertisers such as Microsoft Corp.’s MSN and America Online Inc. unit Nullsoft to increase their advertising on these types of sites by a combined 100 percent in the weeks after the Napster ruling.

In the six weeks prior to the Napster ruling, only two companies spent more than $1 million on Internet music sites. In the six weeks after it, five companies are over that mark, with MSN throwing in over $2 million to promote its new Media Player, which competes with popular MP3 software such as Nullsoft’s audio player Winamp, AdRelevance said.

(C) Reuters Limited 2000.

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