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HITS Daily Double
"People use Napster as a sample... that is the behavior of our customers. I think of it as the headphones you can listen to at Tower Records."
—Napster CEO Hank Barry

NAPSTER’S BARRY
WANTS TO MAKE DEAL

CEO Foresees A Pay Version Of Napster, Personal Jet-Packs, Colonies On The Moon!

Hank Barry, CEO of Napster, is entertaining the thought of changing his company's business plan to a subscription model, whereby the popular tech company will work with the major label groups to charge for the sharing of files.

The possibility of making Napster available for a fee instead of its free format was a major topic of discussion for Barry at his alma mater, the University of Michigan, where he spoke to business and law students on Friday. "We want to be able to pay the record companies as some kind of settlement," he said. "The artists should be compensated as well," the Michigan Daily reports Barry as saying.

Barry reportedly said if Napster were to become a pay site, he would expect to lose up to 90% of its 30 million users immediately. "We're going to suffer a diminution of content. I won't do it without industry support," he said.

But even with that loss, Barry said he would be able to pay $500-$600 million a year to the record companies if they agreed. Napster is currently embroiled in a legal battle with the RIAA, which represents the major record groups, over the legality of Napster's alleged copyright infringing practices.

Barry spoke of his hope for an out of court settlement, the possibility of a record industry-supported Napster-style pay site and why Napster does not violate copyright law, the college's newspaper reported.

"It's an index," Barry said. "That's really the service being provided. But I think that's one of the problems I face. If there is substantial non-infringing use of the technology, we're not going to shut it down because there is some infringing activities. People use Napster as a sample... that is the behavior of our customers. I think of it as the headphones you can listen to at Tower Records."

Barry visited the institution on Friday (9/22), coincidentally the same day university officials announced their decision not to ban the use of Napster on campus (hitsdailydouble.com, 9/22).

University Chief Information Officer Jose-Marie Griffiths took a stand on the issue after receiving a letter from Howard King, the lawyer for Dr. Dre and Metallica, who sued Napster for copyright infringement.

On Tuesday, Griffiths sent King a letter defending the use of Napster for locating uncopyrighted materials. "This has been an issue we've been looking at a long time," said Griffiths. "We expect individuals to be aware of copyright laws."

Griffiths' correspondence follows a letter from King, who cited the Digital Millennium Copyright Act of 1998, that asked universities to shut down Napster because of a "moral, ethical and legal obligation" to keep copyrighted material from being exchanged over their systems.