Life after Napster pondered

Napster’s pirate flag is coming down, but downloading music isn’t going away.

No matter that a federal judge has ordered Napster to stop its users from sharing copyright songs. There are scores of copycat sites offering pirated music for free, and record companies are moving fast to sell songs online.

That may be bad news for conventional music stores. If people get music online, will they trek to the mall for a CD?

No one knows the answer.

Just how stores fit into a post-Napster world was a big topic at this week’s 43rd annual National Association of Recording Merchandisers convention in Orlando. The meeting started Sunday and will end today.

The obvious strategy is for retailers to join the online movement. And the best bet may be a blend of old and new, with customers going to stores to download songs and record them on CDs.

Those are possibilities that few would have considered just a few years ago.

Napster’s glory days may be over — the judge in its copyright-infringement case gave it until today to block 135,000 pirated song files — but it revolutionized the music business.

Before, if someone liked a song, he drove to Best Buy or Sam Goody and bought the cassette or compact disc, even if he liked only one or two of its songs. He played music on car stereos and boom boxes. He compiled mix tapes, spending an hour or two copying his favorite songs onto cassette, one track at a time.

Napster, created two years ago by a college freshman, gave people a choice.

With a few clicks on their computers, they could download practically any song. They could compile a playlist of their favorite tracks in seconds.

They could make their own CDs, giving them 70 minutes of music without the hiss of a cassette.

But the biggest part of Napster’s appeal is that it’s free, said Jon Fay, vice president of Mercer Management Consulting of New York.

Fay showed 300 retail executives at the convention a video of college students who participated in focus groups to discuss online music. Several said CDs cost too much. But one woman said she didn’t like retailers. “I see record stores as being more ‘This is what I want you to buy,’ ” she said.

And many said Napster offered a wider selection and greater convenience than any store ever could.

Some conventional retailers, such as Sam Goody, are experimenting with online sales. SamGoody.com offers about 150 digital titles, from 99-cent singles to $13.29 albums.

Pamela Horovitz, president of the music retailers group, said digital services can help in-store sales.

Liquid Audio of Redwood City, Calif., is touting an e-music kiosk that lets people pick songs and burn CDs in a retail store. Some e-tailers say free downloads can help sell more CDs.

Amazon.com, the No. 1 online retailer, recently expanded its digital music section, offering users thousands of songs they can download free. Unlike Napster, it has permission from the record companies.

The labels may choose one of two formats: MP3, the same format Napster uses, or Liquid Audio, which lets the companies limit whether a file can be burned onto a CD or saved on a portable player. The labels can even set a time limit on a Liquid Audio file. That means it won’t work after a set number of days.

Amazon says its downloads may attract people looking for free music from big-name artists such as Paul Simon and Mary J. Blige. But many of those same people end up buying the CD, said Greg Hart, music group manager for the Seattle-based e-tailer.

While downloads will continue to grow in popularity, they won’t replace compact discs anytime soon, Horovitz said.

U.S. consumers spent $10.5 billion on music in 1999, the most recent year for which data are available.

Online music sales, including digital song files as well as CDs ordered from online stores, are expected to climb from $836 million in 2000 to $5.4 billion by 2005, according to Jupiter Media Metrix, an e-commerce consulting firm in New York.

That’s a big increase, but the numbers show there are a lot of consumers who won’t buy music online in any form, either because they don’t have the equipment or because they simply don’t want to.

Ordinary music retailers will be around, “not just for the forseeable future, but forever,” Horovitz said.