September 27, 2001, 10:34 AM — Bertelsmann AG executives are predicting an early, successful start of Napster Inc.'s long-awaited new subscription file-sharing service.
"I'm confident that (the service will be relaunched) in the near-term, foreseeable future," Klaus Eierhoff, chairman and chief executive officer (CEO) of Bertelsmann's DirectGroup division, told reporters here Thursday. He added that nearly 2 million users have signed up for a beta test of the service.
"If that's not an expression of confidence, then I don't know what is," he said at the company's annual financial news conference.
Bertelsmann announced an "alliance" with Napster late last year, with a view to developing the upstart file-sharing company into a fee-based service. In July, a former executive of the German media conglomerate took over as Napster's CEO. Bertelsmann has not released details of the financial relationship between the companies, which Eierhoff termed a "financing agreement with option on majority."
The first steps toward clearing up Napster's legal problems have been taken, Eierhoff continued, mentioning a preliminary settlement signed Monday with the National Music Publishers' Association (NMPA) and songwriters it represents.
"That encourages us that the remaining legal questions will be settled," he said.
Napster still faces a legal battle with recording labels represented by the Recording Industry Association of America Inc. (RIAA).
Napster, in Redwood City, California, can be reached at +1-650-373-3800 or http://www.napster.com/. Bertelsmann, in G
