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Report: Napster Users Don't Share Well With Others

Napster has become so effective in blocking the trade of copyrighted material that the sharing of songs on the service has virtually ground to a halt, research firm Webnoize said on Wednesday.

Webnoize said users of Napster’s latest software, which incorporates file identification technology, had an average of 1.5 song files to share at any given time as of Wednesday, down from a peak of 220 songs in February.

The newest version of the once-phenomenally popular song-swap software includes audio fingerprinting technology, developed by Relatable, which helps Napster filter out copyrighted songs in order to comply with a court injunction.

The fingerprint technology, which identifies music based on its acoustical properties, has sharply diminished the number of songs that are available to share, said Webnoize.

Webnoize senior analyst Matt Bailey said the number of Napster users has also slid as the amount of available music has shrunk.

As of Wednesday, 320,000 users were logged into the system, compared to an average of 1.57 million simultaneous users at Napster’s February peak, he said.

Napster had no immediate comment on the findings, but has said more content should be available on the service as a new software upgrade allows users to find songs that had been inadvertently blocked.

A Napster spokesman said the latest version of its software, known as 10.3 and which was released in a beta test version on Friday, should enable people to trade songs by independent or other artists which are not required to be blocked under terms of the court injunction.

WebNoize said the 10.3 version was among the applications it studied. Out of 320,000 logged onto the system, 80,000 users were connected using the new Napster application, it said.

The injunction against Napster is the result of a landmark copyright lawsuit filed by the world’s big record labels – including Vivendi Universal’s Universal Music, Sony Music, Warner Music, EMI Group Plc and Bertelsmann AG’s BMG.

The labels first sued Napster in December 1999, claiming it was a haven for copyright piracy that would cost them billions of dollars in lost music sales.

Napster suffered another legal defeat this week when a federal appeals court rejected its request for a chance to challenge the crippling injunction.

On a more positive note, Napster this month clinched a licensing deal with MusicNet – a joint music subscription service between RealNetworks Inc. (NasdaqNM:RNWK – news) and BMG, EMI, and AOL Time Warner – to carry these labels’ music once it launches anew secure version, planned for later this summer.

Both EMI and Warner, however, issued statements on the day that deal was announced emphasizing they would not hand over their content to Napster until it had proven it had developed a secure system that pays royalties.

On Tuesday, Napster also signed more than 150 independent European labels to its new royalty-paying service to be launched this summer.

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