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Exchange of secure music files with new Napster; Gnutella removed from the market
A new version of the music file-sharing program Napster will allow users to exchange secure Windows Media Audio files in addition to unprotected MP3 files. The protected files transferred through the new Napster program will keep their security features. Some protected music files can only be played for a certain number of days; others won't play unless the user has purchased them, which puts a security key on the user's computer.

It seems however that the security feature Napster mentions, can easily be removed with a hack program currently in circulation. Napster is talking with the American Society of Composers, Authors and Publishers (ASCAP) and Broadcast Music, Inc. (BMI) as to whether Napster needs public performance licenses. Mechanical rights must be paid any time a sound recording is distributed, regardless of the medium and whether or not the new recording is sold. If Napster and future music exchange sites find a way to generate revenue that is directly based on the trading of music files, they might have to pay for mechanical rights. So far, Napster has taken a position of non-involvement in the distribution of recordings, maintaining in its software license and on its website that users are responsible for following applicable laws. Using the new Napster version is free also, so licenses that the company decides to purchase will have to be paid with investor funds. Napster's website does not currently display advertising and therefore has no source of revenue.

Gnutella, another file-sharing program, allows users to exchange any kind of file, including Windows Media Audio and movie files, though MP3's account for most of the axchange. At Nullsoft, the America Online-owned software company where Gnutella was created, an executive declared last week that the program was an "unauthorized, freelance project". The program is no longer available through the company's official site, though it is still being distributed by other websites.

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