Future fun: Napster and downloadable digital games

Napster's deal with German music publishing giant Bertelsmann last year, since which several other court challenges to the file-swapping site have been dropped, caused much speculation about how the alliance would generate revenue (see, Music downloads: Dancing to a different tune http://www.silicon.com/a40173 ). Few doubted that the site's users, of which there are around 57 million, would be hit by the introduction of subscription-based downloads.

Thomas Middelhoff, CEO of Bertelsmann, is now convinced, says the Guardian: "We can introduce in June or July of this year a subscription model, with a real working digital rights management system." The announcement, made at the Davos forum, was met with skepticism by other panelists, some of them representatives of companies, such as Sony and Vivendi, suing Napster for breach of copyright.

Middelhoff was confident nonetheless, referring to the potential online future of music, video and entertainment in general. Market research conducted among 20,000 Napster users, which one could argue is a relatively small sample in such a lucrative global industy, last year 'clearly indicated' the willingness of users to pay for the privilege to play.

Early summer it looks to be - stock up your hard drive and MP3 players this spring...

Sticking with entertainment, the Financial Times reports of a deal finalised yesterday between Japanese games maker Sega and digital set-top TV box manufacturer Pace Micro Technology. Together they are to create a box which will 'emulate' Sega's Dreamcast console and allow viewers to download and play video and computer games while watching TV or videos.

Sega is in the midst of a massive restructure that may yet see it withdraw from the console market due to substantial losses. However, analysts predict the joint venture, for which negotiations have been ongoing for a year, could revolutionise the games and digital TV markets and provide a much-needed boost...

Increased investor confidence, however, will come too late for Walt Disney. The company is to close its loss-making internet subsidiary with the loss of over 400 jobs and up to $840m. The portal Go.com will be abandoned and Disney Internet Group will be absorbed by its parent company. The content sites - for children, Disney.com, sports, ESPN, and news, ABC - will be maintained in "a leadership position", said chairman and CEO Michael Eisner...

Finally, to round off this round up of ebusiness entertainment, The Financial Times tells of two companies targeting teenagers in their battle for broader markets. UK Smart and Splash Plastic are looking to attract users too young - or too fearful - to own a credit card, and therefore excluded from ecommerce.

Splash Plastic has united around 100 e-tailers so far in a scheme which sees users purchasing a card that can subsequently be topped up at one of 7,400 PayPoints in the high streets. Once the card is in credit it can be used to purchase goods online - a current account without the account.

UK Smart is to implement a similar system. £20 cards are available from Post Offices, the credit can then be spent online. The company aims to attract 60,000 card holders by the end of the year. Let's hope the schemes are more popular than the flagging smartcards and we see a spree of online shopping...