Napster Gets New Life
Three days after announcing their resignations, Napster Chief
Executive Konrad Hilbers and founder Shawn Fanning have both
rejoined the company, following an $8 million dollar bailout by
Bertelsmann Entertainment Group. BEG owns several labels, including
Arista Records and J Records, where Santana, Alicia Keys and dozens
of other artists make their homes. The deal, announced today,
staves off an imminent bankruptcy filing, which prompted the
departure of the two executives.
“Bertelsmann understood our vision when they first invested in
us,” said Fanning. “They still believe in that vision. I’m ready to
work with the many talented people at Napster to complete the new
service and get it off the ground.”
Hilbers echoed Fanning’s sentiment, referring to the reversal of
fortune, saying: “I have believed from the start that this deal was
a valid and beneficial deal for Napster, the best direction for the
company under the current circumstances. While this has been a very
unusual week, I’m pleased that I and my colleagues can move forward
and give our full attention to Napster’s future.”
The deal provides $8 million towards the payment of Napster’s
creditors and funds the company’s efforts to relaunch the site as a
pay subscription service that blocks the trading of unauthorized,
copyrighted material. The service has been offline since last July
after two years of legal wrangling with the Recording Industry
Association of America.
“Creating new ways of doing business is never easy,” Bertelsmann
Chairman and Chief Executive Joe Klein said, “but Napster will be
at the forefront of finding business models that respect copyright,
reward artists and deliver entertainment value to consumers.”