Dollars 4 downloads: the post-Napster era of paying for digital music has finally arrived. Was it worth the wait?

• Author: Richtel, Matt
• Position: Circuits - Digital music becoming increasing available online - Brief Article

Music's move from record stores to the Internet is raising plenty of questions, among them: Are the people who run the major record companies brain dead? Harsh, perhaps, but even record executives have been asking it of themselves.

The question is central to the online music debate. The five biggest record companies control about 85 percent of the music sold in the U.S. Last July, they sued and virtually shut down the Internet's most popular music-swapping service, Napster, and went after other sites that distribute copyrighted music without paying for it. Then, to fill the digital-music vacuum when listeners were clamoring for online alternatives, the record labels gave them ... nothing.

Some fear the companies may have blown their chance to capture millions of fans. Since the summer, users have flocked to emerging online services like Fast Track, which has become more popular than Napster ever was. Only now are the labels finally getting their acts together with official, pay-for-play sites. They're deciding how users can buy music online, how much it will cost, and what users will be able to do with it. Is that better than nothing? Maybe not.

SEARCHING FOR SONGS

One point is beyond dispute: There is a growing demand for music online, especially among teens, as traditional CD sales are slipping. A survey by the Pew Internet and American Life Project last year found that 53 percent of online teens download music. Among 15- to 17-year-old boys online, the figure was 73 percent. More than 80 million people had downloaded Napster's software before last July.

To take Napster's place, the five top record companies decided to launch two subscription services. AOL Time Warner, Bertelsmann, and EMI backed MusicNet, with a stable of artists including the Dave Matthews Band, Kid Rock, and Faith Hill. Universal and Sony--who have Destiny's Child, Shakira, and many more--financed Pressplay. The services were originally scheduled to launch last summer, then late summer, then in the fall. MusicNet and Pressplay didn't actually debut until last month.

In the meantime, Napster's top successor became the Fast Track network, which allows users to freely exchange music online, download and listen to it on their computers, move it to portable MP3 players, and even burn their own CDs. Fast Track tries to get around Napster's copyright problems by leaving the music swapping only between users, peer to peer, without involving its own computers, as Napster did...