The once-dominant file-sharing service created by teenager Shawn
Fanning has been off-line since July 2001. While Napster is still
facing the lawsuits that forced that shutdown, which date back to
December 1999, the bankruptcy protection puts them on hold. Its
company opponents can, however, make a claim before the Delaware
bankruptcy court, which must now decide how Napster should best
settle the claims against it.
Napster’s creditors include The Association of Independent Music
of London, which represents around 700 UK indie labels, at $3.79
million, and the law firm of Boies, Schiller & Flexner, which
is owes $2.14 million.
Bertelsmann is expected to struggle to see a return on its
investment. It plans to re-launch Napster as a fee-based music
service. However, to date, fee-based internet music services have
been unpopular compared to free P2P alternatives, most notably
KaZaA, which appears to have more users now than Napster had at its
peak of popularity.
A current record industry lawsuit against P2P service MusicCity
is about to be extended to include Sharman Networks, owner of the
KaZaA service, according to the Recording Industry Association of
America. However, because KaZaA is a decentralised service, it is
believed to be impossible to shutdown, even if Sharman Networks is
put out of business.
