Pay-per-song Napster ready for winter launch

Music giant BMG has promised Napster will be back online by the end of the year with a subscription-based service.

However, rivals say it will face stiff competition from the multitude of underground sites still offering free music.

A source at file sharing site Gnutella said: "Napster's subscription service will never work when there's stuff for free."

The source claims a new file format to be adopted by Napster will not appeal to users. He said: "People will not want to change formats from MP3, which they are set up for and used to, to some Windows format that they've got to pay for."

However, Sarah Roberts from the British Phonographic Industry (BPI), which represents British record companies, thinks users will be prepared to pay for Napster as long as it educates its public.

She said: "People need to be educated on copyright and the rules when at school. I think most people will be happy to pay for a good service that doesn't involve them breaking the law."

Napster has not yet announced its pricing for the service but detractors think it will be unattractive at any price as long as it's competing with free music.

The source at Gnuttella said: "Now Napster is partnered with Bertelsmann (BMG) it has to offer a service that no one else is offering and something with a price that no one else can rival."

Roberts notes that Napter's run-in with the law is the one event that opened the door to getting a revenue stream out of online music distribution.

She said: "Two things weren't there before: a legal precedent dealing with the illegal distribution of copyrighted material and the technical ability to make music held on the site secure and track royalty payments back up the chain. Because of the Napster case, both of these problems have been solved."