Kurt Hanson is working from the Strategic Media Research offices today. To reach him, please call 312 726-8300, or e-mail him here.

From the Napster press release: "Bertelsmann AG and Napster, Inc. today announced the formation of a strategic alliance to further develop the Napster person-to-person file sharing service.

"Bertelsmann AG's newly formed eCommerce Group, BeCG, and Napster have developed a new business model for a secure membership-based service that will provide Napster community members with high-quality file sharing that preserves the Napster experience while at the same time providing payments to rightsholders, including recording artists, songwriters, recording companies and music publishers.

"Under the terms of the agreement, once Napster successfully implements its new membership-based service, Bertelsmann's music division, BMG, will withdraw its lawsuit against Napster and make its music catalogue available."

Read the entire press release here. The new BeCG-Napster web site, which features a audiocast of the press conference in New York, is here.

...

... A few selected quotes from the press conference, from the Industry Standard: -- Andreas Schmidt, president and CEO of Bertelsmann eCommerce Group: "we'll withdraw the lawsuit and make our catalog available; that's the spirit of this agreement." -- Another corporate representative: "This process where people take files, put them on their PC and share them, is going to continue. We're going to let Napster be Napster; that's the essence of what this community's all about." --Hank Barry, CEO of Napster, expects the company "will charge a monthly membership fee of $4.95 for the service." -- Asked about the possible scenario of other major labels not taking part in the service, a representative said: "We're very optimistic. There's always hypothetical situations, but we've got a great set of principals in place, and we want to work with them and come up with an overall solution to this problem." ...

Hilary Rosen of the RIAA has commented on the announcement (here). She said "We welcome anyone’s decision to become a legitimate player in the online music industry, building a business based on licensed uses of copyrighted works..."

"Today’s announcement does not bring an end to the court case. There are multiple plaintiffs in addition to BMG; and BMG itself has said that it won’t withdraw its complaint against Napster until they actually implement a legitimate business model."

"This case...has never been about peer-to-peer technology itself, which can be implemented legitimately, as today's announcement confirms. I am glad that Napster has gotten that message and hope that this announcement sends the right signal to others who are operating or intending to operate sites or businesses that facilitate piracy..."

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From the company press release: "Cox Radio announced today that it has formed a new unit to focus on its new media opportunities and manage its Internet assets. The new Atlanta-based division will be called Cox Radio Interactive (CXRi).

"Gregg Lindahl, the former President and COO of mp3radio.com, will serve as the division's Vice President and will report directly to Robert F. Neil, Cox Radio's President and CEO.

"In addition, Cox Radio announced that it is continuing its strategic relationship with Cox Interactive Media, whereby the two companies will promote each other in their common markets. CXRi will assume day to day management of Cox Radio's web sites and Internet commercial inventory beginning in January 2001...

"Lindahl was previously President and Chief Operating Officer of mp3radio.com, a joint venture between Cox Interactive Media and MP3.com which was purchased by MP3.com in April, 2000.

"Prior to his duties as mp3radio.com, Gregg Lindahl was Executive Vice-President and Chief Operating Officer of Eagle Research Group, an affiliate of Cox Broadcasting, where he also served as President of Eagle Research. Prior to that he held high level positions at a number of Cox Radio stations, beginning in 1986..."

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From CNet News.com: "Sprint will start selling a new hybrid MP3 player and mobile phone, hoping to attract free-spending young consumers who are increasingly receptive to online music and all things wireless.

"But the company's real ambitions lie in the service that comes with the phones. In conjunction with Web company HitHive, Sprint has created an online 'storage locker' for MP3 files, where customers are meant to collect their music files for later download to their phone MP3 players...

"That's much the same strategy pursued by most of the big record labels, which have partnered with Musicbank and more grudgingly have given licenses to MP3.com to create the same kind of service. Sprint's version doesn't have deals with the record companies, so consequently will lack some access to music offered by the others...

"The company says the service kicking off Monday is just a first cut, which will expand once bandwidth and phone technologies improve. Once 'third-generation' high-speed wireless networks arrive--a development still a few years away in the United States--the locker service could evolve into the equivalent of an online radio where consumers choose their own play lists, accessible from phones, car radios or many other devices...

"The Samsung phone itself, which will go on sale for $399 across the country Wednesday, allows subscribers to store 64 megabits of data, which translates into about 20 songs. It comes with a set of earphones that double as the telephone's receiver and microphone. The music will cut out when a call comes in..."

Read the entire story here.



From Internet.com CyberAtlas: "Content providers who think rich media offerings will only get airtime on the PC are mistaken, according to a report by Forrester Research, which predicts broadband's impact to reach TVs, stereos, and console systems as well.

"By 2003, broadband content will be divided sharply by device -- PCs will comprise one-half of all broadband devices, while TVs and game consoles will dominate the other half. Multimedia-focused entertainment will gravitate toward TVs and gaming consoles, while streaming interactive content and software updates will flow to PCs, according to Forrester's report "Broadband Content Splits."

"'Everyone expects broadband to grow rapidly and create a market for new types of high-speed enhanced content,' said Bruce Kasrel, senior analyst at Forrester Research. 'What is unexpected is that most of broadband's impact will be directed to other devices besides the PC. As all types of devices connect to the high-speed Internet, content will shift to the most appropriate device, like digital music files being played back on the stereo system. Media providers must anticipate the most appropriate device for their content and tailor the consumer experience and business models to take advantage of that environment.'...

"By the end of 2001, broadband connections will double, and all major metropolitan areas will have at least one form of high-speed access, totaling 11 million US households, compared with five million households today. Consumers hungry for broadband will go online more often and for longer periods of time than their dial-up counterparts.

"Broadband's first killer application will continue to be Internet audio. By 2002, 19 million consumers will use the Internet for music downloading, and 25 percent will be broadband users. These users will also expect highly interactive Web interfaces and drive demand for specialty broadband-enabled devices, such as interactive set-top boxes, to experience more robust entertainment options...

"In 2005, 191 million devices will connect via broadband. PCs will constitute only 36 percent of these devices, but 70 million high-speed-enabled computers will still need their own content. As other devices siphon away multimedia content, consumers will use PCs only for complex, highly interactive tasks and software downloads..."

Read the full story here.

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November 5-7	NAB European Radio Conference, Berlin
November 12-14	Canadian Association of Broadcasters (CAB) "Broadcasting 2000: On-air / On-line," Calgary
Nov. 28-Dec. 1	Radio Ink Internet Conference, Santa Clara, CA, featuring a brand-new national study on Internet radio usage presented by Eric Rhoads & Kurt Hanson
February 1-4, 2001	RAB 2001. Details coming soon.