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A new survey by digital entertainment research and information company Webnoize suggests that most college students who use Napster's controversial music file-swapping software would be willing to pay to keep that privilege.
According to Webnoize, more than half of the 4,294 students surveyed at four-year colleges in New England said they would pay $15 (US$) per month to use Napster as an ongoing service. The findings counter the argument by major record companies that Internet technology allowing users to share digital music costs them royalties.
The survey results came Wednesday just as reports surfaced that MP3.com (Nasdaq: MPPP) may be nearing a settlement of its legal dispute with the five largest record labels.
The record companies, led by the Recording Industry Association of America (RIAA), won a judgment against MP3.com early this year in a lawsuit claiming that the My.MP3.com service infringes copyrights by allowing users to share their digitally copied music stored on the company's site.
According to published reports, MP3.com may agree to pay $75 to $100 million to RIAA in lieu of damages.
MP3 stock rose dramatically Wednesday on the news of the possible settlement. The stock gained 5 1/4 per share to end the day at 16 7/8.
Subscription Service
In its new report, "Napster University: From File Swapping to the Future of Entertainment Commerce," Webnoize suggests that the rising popularity of MP3 file-swapping among college students may soon make subscription-based e-commerce in digital music commonplace.
"The music industry already prices CDs so that revenue generated from successful releases offsets expenses incurred from most others, which fail," Webnoize Analyst Ric Dube said. "Charging one monthly price to hear it all could expand the market by providing more value for the dollar."
Digital music is thriving on college campuses, according to the survey. Nearly 23 percent of students questioned said they are spending significantly less time listening to compact discs than a year ago, while 63 percent said they spend more time listening to digital music.
Fifty-seven percent of the students surveyed said they use Napster at least once a week, and 47 percent said they spend more time on the Internet than they did a year ago.
Moving Away from Computers
In related news, MP3.com announced a partnership with ReQuest Multimedia Inc. to allow digital music listeners to access content and services from MP3.com without a computer.
The ReQuest technology will make the music accessible via a home stereo "digital jukebox."
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