Future of Napster
With a meager year and a half existence, Napster has revolutionized the music industry with its leading person-to-person file sharing community. Shawn Fanning, who at the time was an eighteen year-old freshman at Boston's Northeastern University, founded Napster in May 1999. With over 38 million users, Napster is the fastest growing community in the history of the Internet. This number will likely increase in the future as Napster's popularity continues to escalate. According to an October study conducted by Webnoize, the leading authority on the digital entertainment economy, 69% of college students surveyed are monthly users of Napster, while 43% use Napster on a weekly basis. As a result, Napster has captured the attention of venture capitalists who have acted quickly to secure their investment last spring.Napster's unique ability to offer an easy-to-use, high quality service has granted the company an unprecedented position in the music industry. Unofficially valued at more than $100 billion, it is no surprise that Napster and Shawn Fanning have been the recipient of numerous industry awards for technology, innovation and marketing. Not only can users search for new music by sharing music files among members free of charge
The strategic alliance between Napster and Bertelsmann can reap many benefits and position the companies as market leaders in the emerging digital media industry. Although Bertelsmann opened themselves to risk by breaking with the rest of the music industry leaders, they can capitalize on being the first to enter this new industry. Their first mover advantage, combined with Napster's base of 38 million users, can propel them ahead of their competition. This alliance not only gives Bertelsmann access to the fastest growing community on the Internet, but it also provides them with a stronger foothold in the U.S. music market. Also, Bertelsmann can use this alliance as a stepping-stone to incorporate and expand their other business areas into the ever-growing demand of the Internet. Their current presence on the Internet through barnesandnoble.com and CDNOW has not been as successful as initially forecasted. As a result, this alliance with Napster can help them revive their lackluster Internet existence. Another advantage for Bertelsmann is the leverage they possess due to the current lawsuit against Napster and their established global presence in the media industry. In the future, companies can use Napster as an effective marketing tool, capable of reaching customers worldwide. Record companie
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Approximate Word count = 877
Approximate Pages = 4 (250 words per page double spaced)
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