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Napster Inc. Speaks Out Against RIAA Filings and Statements
SAN MATEO, Calif., June 13 /PRNewswire/ -- Napster Inc., the world's leading file sharing community, today released the following statement by CEO Hank Barry in response to the recent Recording Industry Association of America's filings and statements:

"We are trying to find ways to work with all of the constituencies that are part of the Napster community, including the major record companies and the independents. This case is about whether it is legal to share mp3 versions of sound recordings over the Internet. We say yes -- the major labels say no.

"Napster has pioneered a shared-computer 'distributed content' architecture. The files are not on one big server or one central location, they are all over the Internet on thousands of individual personal computers. Distributed information technology is the future. File sharing technology is here to stay. It does not threaten copyright any more than any of the other technologies that have been developed in the past. The RIAA is seeking to control this technology by claiming that its only use is to infringe. Nothing could be further from the truth.

"People are sharing over Napster, not selling. Napster is doing no harm to the record industry. By their own numbers, record sales are up, and file sharing has proven to be a great promotional tool. People over the age of 30 are reconnecting to music through Napster in ways nobody anticipated. In fact, a recent public study said 51% of Napster users are over the age of 30. Further, over 95% of all files that are downloaded are soon erased. Napster is a sampling and listening experience, not a permanent copying experience that would displace conventional CD sales.

"The RIAA's position in all of this is, as they say, deja vu all over again. Every time an innovation has made it easier for people to enjoy music more conveniently and less expensively, the music industry has complained and tried to slow the adoption of the technology. And every time, the music industry has nonetheless benefited.

"Let's take a look at some specifics about what is happening now:

"First, the RIAA tries to drum up proof of lost sales due to Napster, but its efforts fall flat. The RIAA ignores the 8% overall increase in sales in 1Q 2000, when Napster was a factor. Instead, they dredge up the discredited Soundscan Report that studied sales 'near colleges' in 1Q 1997 through 1Q 2000. The report shows that a minor decline in college store purchases happened from 1998 to 1999 -- before Napster even existed. There is nothing to suggest that Napster in late 1999 early 2000 had any impact the course of sales. And, the study did not take into account the impact on the surveyed stores of big box or online retail competitors. The survey also did not refer to independent record store sales generally, which are down even more than those in 'college' areas. The survey says nothing about Napster or its users.

"Indeed, there is nothing to suggest that Napster does anything but drive up sales. In fact, an independent Pew Foundation researcher said recently ' ... 'one of the trends was that people used Napster and Gnutella to sample music and to find new music,' said Lenhart. 'We also found as a trend ... people are going out and purchasing music they downloaded.' (source: Napster is interesting people in music and driving them to buy music.

"The RIAA commissioned the Field Survey to do a study and claims from that study that Napster displaces CD sales. Their own results show Napster's impact is primarily promotional. #1 impact Napster had on purchases, according to their survey? 'Helps me to decide or to make a better selection.' (p 17.)

"Let's not forget -- each of the major record companies and their global parents have invested in the all the hardware and software technologies that make it possible for people to listen and share music over the Net. And they have promoted those technologies. The record companies permitted the software companies to install the software used to make mp3 files. The record companies permitted software companies to make available the software needed to play the mp3 files. The record companies advertise that users should download mp3 files. Every PC with a CD player allows you to copy CDs. Almost every PC now comes with software to create mp3 files. Every online service allows users to find mp3 files. Every email service allows you to send an mp3 file. As a friend said, 'Why does Sony make the VAIO Music Clip if it does not want people to share mp3 files?' Confusing? -- you bet.

"Now, the RIAA even claims that '100%' of Napster users are copyright infringers -- arguing that merely having a copyrighted file on a hard disk and joining a file sharing network renders Americans liable for infringement, whether that file is downloaded or not, and regardless of the use to which it is put. The industry is seeking nothing less than to eliminate file sharing as a technology -- just as it has sought to squash prior technological advances. Napster is confident that the courts will see past these efforts.

"Napster has a right to do our work. We are a file sharing software application and community company. Napster is a powerful tool and I have no doubt we will win this case on the merits, and that we will continue to benefit from the support of our community, artists, and -- yes -- even the record companies, whose executives already know the simple truth, Napster has been and will be very, very good for music -- and for music sales.''

SOURCE: Napster Inc.

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