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Napster rivals winning popularity contest
By Gwendolyn Mariano
Staff Writer, CNET
November 5, 2001, 2:05 p.m. PT

Alternative file-trading services continue to gain momentum and could soon surpass the granddaddy of song swaps, Napster, at the height of its popularity.

Analysis company Webnoize said Monday that the number of digital music files downloaded using Kazaa, MusicCity and Grokster jumped 20 percent, increasing to 1.81 billion in October from 1.51 billion files in September. The three applications have their own brands, but they use identical software that lets people tap into the same network of computers.

Webnoize also found that 1.3 million file traders were typically logged on to the combined network simultaneously in October, compared with 1 million the previous month. Matt Bailey, senior analyst at Webnoize, predicts that by November that number will surpass the popularity of Napster, which had 1.57 million simultaneous users at its peak.

The study comes as Kazaa, MusicCity and Grokster face legal attacks from the record and film industries. In October, the Recording Industry Association of America and the Motion Picture Association of America sued the file-trading networks in a move to prevent people from swapping copies of music and films over the Web.

"File sharing still is incredibly popular among consumers," Bailey said. "While the closure of Napster may have temporarily put a break on its growth, it hasn't been very long before a new network has re-emerged or has surfaced to really replace Napster...We now have a new network better than Napster ever was."

The MPAA said a date for a court hearing has not been set.

Bailey said the lawsuit has heightened consumer awareness of alternative file-swapping services, which once operated under the radar of many file traders. When Napster's court case began heating up last year, it coincided with strong growth in the network as large numbers of people became aware of the service for the first time. Now, with a new court case making headlines, Bailey expects more people to find their way to the FastTrack network, the peer-to-peer company based in Amsterdam, the Netherlands, that provides the software used by Kazaa, MusicCity and Grokster.

Already, the number of file traders tuning in to the alternative services has skyrocketed by 480 percent since June, according to Webnoize. Bailey attributed the popularity of post-Napster services to an increased interest in file sharing worldwide and an expanded range of content. With Napster, consumers could share only music. The second generation of file-sharing systems, however, let people trade many types of digital media, including movies and software, Bailey said.

He added that the technology itself has improved since Napster's heyday. With FastTrack's software, the download times are shorter partly because the network includes a system called distributed downloading. Such a system lets consumers download different sections of a file simultaneously from several peers rather than requiring them to download an entire file from one person.

Napster itself stopped file trading in July as it works on a copyright-friendly subscription service. It now plans to launch that service in the first quarter of 2002. It is still fighting a copyright lawsuit filed by the record companies.

Despite its own pending lawsuit, MusicCity says it is confident about its future and is working to increase revenue.

Steve Griffin, chief executive of StreamCast Networks, which handles the MusicCity site, said the company relies on advertising revenue and serves up to 150 million ad impressions per day. But the company is looking for additional sources of revenue, including selling subscriptions for an ad-free version.

Griffin declined to provide specific financial details for the company.

"We're really excited about our future and all the things that we're doing to connect users together," he said. "We believe that is how the Internet was intended to be; it was originally created to let people directly connect with each other."

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