Why all the fuss about Napster?
Napster was an internet sensation, attracting millions of computer users to a popular, albeit potentially illegal, online music service that thrived as dotcoms all around it shrivelled and died. The company's founder, Shawn Fanning, was only 19 when he set out to do what the major music labels have still failed to match: making online music distribution as widespread and popular as high street stores. And thanks to a deal the company signed this week, it looks like it may be back on the road to success.

What is Napster?
Napster is known less for what it is now than for what it was before the recording industry sued the guts out of it. It used to be an innovative song-swap service that allowed its millions of members to exchange high-quality MP3 music files online. Members were able to search through each other's extensive music libraries to find the exact tracks they wanted. And best of all, there was no charge for the service.

So why isn't it as good as it used to be?
The world's five biggest music labels - AOL Time Warner, Bertelsmann, EMI, Sony and Vivendi Universal - did not take kindly to Napster's free distribution of music on which they would very much like to make a profit. The Recording Industry Association of America sued Napster for copyright infringement in December 1999. In March this year a California judge ordered Napster to stop distributing copyrighted material until the matter had been decided at trial. That injunction effectively shut down Napster.

Was Napster actually cutting into CD sales?
The music companies say yes, but at least one study of more than 2,000 online song-swappers found them 45% more likely to buy music than other fans.

So what is this new deal?
Three of the record companies - AOL Time Warner, Bertelsmann, and EMI - have agreed to licence their material to Napster, which means the company can set up a legally-sanctioned service. Now Napster just needs to find a way to make money from its catalogue, a problem it never had to face when it was a not-for-profit internet shareware organisation. The company has publicly discussed setting up a subscription service, but not everyone is convinced that its members will be willing to pay for music.

What is the alternative?
The software that fuelled the song-swap revolution is still in widespread use on other, Napster-like sites. Some of those sites, such as Scour.com, have already come under legal scrutiny themselves. But the record companies fear that users who want free music downloads will always be able to find an alternative source. There are also legal alternative digital music sites now from the likes of Yahoo! and MTV, and they have taken advantage of Napster's legal difficulties to court its users. The music companies themselves have also launched rival music download services. Last month, Sony and Vivendi Univeral launched Duet, a subscription service that uses RealNetworks MusicNet, the same platform that the new Napster service will use.

Does the deal mean that the recording industry drop its law suit against Napster?
No, the legal dispute continues.

Useful links
Napster
Scour.com
Recording Industry Association of America
MusicNet