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Fool Plate Special: Napster's Requiem
This is the way Napster ends: not with a clang but a whimper. The file-swapping website died earlier this week, but most members of its once-loyal legion -- a mass of music buffs that topped 50 million registered users -- probably haven't even heard the news of their once-beloved site's passing. They have long since moved on, taking with them old MP3 files and fading memories of a copyright rebellion in which music piracy seemed, almost, justifiable.

But those days are gone now. And like a once-popular hotspot that fell out of favor before being engulfed in flames, few have gathered to wax nostalgic amongst the embers. Can you blame them? The Napster most had grown to know and love imploded months ago. Once the 9th U.S. Circuit Court of Appeals ruled in favor of the major record labels, it was just a matter of time before the top draws would be pulled off the network and file-identification honed to the point where intentional misspellings -- nudge, nudge, wink, wink -- of the names of popular songs and artists would be eliminated.

So while Monday's suspension of file trading on Napster may have been labeled as "temporary," the flatline on the cutting board seems more permanent. It won't be long before Napster comes back as a reluctant puppet in which the labels pull the strings of a premium-priced and regulated online file-swapping experience.

Napster traffic peaked back in February. It wasn't, however, a blissful autumn: It was more of a mad scramble as users set out to download as many files as possible while the court readied its death sentence. The war's over, man. Warner (and its four other major-label buddies) dropped the big one. But who won? Trying to find a victor is as difficult a task as finding a currently active Napster user.

The hardest-hit right now are probably the makers of portable MP3 players. While Napster-mania had audio buffs filling up their Nomad and Rio players, that music has died. Creative Technology, the multimedia specialists behind the Nomad jukebox, announced this week that June-quarter sales will come in below projected levels. Rio parent SONICBlue, meanwhile, has had it even worse. Last month the company let go nearly a third of its workforce.

That was probably an expected casualty, but what happened to the recording industry and its cries that Napster was eating into music sales? Leading pre-recorded music retailer Sam Goody, now part of the Best Buy family, reported a 6% decline in same-store sales for the mostly Napster-free June quarter. AOL Time Warner and Sonyare still looking to ditch their Columbia House record club subsidiary.

Has the death of Napster also sated the consumer's thirst for major-label talent? Is there a rift growing between the established artists and their fan base? If that were the case, music fans would be rushing to online music distributors where unsigned artists turn up the amps for free -- but they're not. Indie haven MP3.com, with more than 150,000 musical acts aboard, is now just weeks away from closing its sale to Vivendi at $5 a share. That is well below its post-IPO splendor of two years ago, and one would think MP3.com could have held out for more if it truly believed in its indie-empowering revolution.

While Napster lit a fuse by popularizing the peer-to-peer file sharing process, the winds of change have blown it out. Yes, there are Napster alternatives, but it will never be the same. Legal ramifications stomped on the mother of all anthills in Napster, and ants scurrying to new homes will meet a similar fate if they grow too big.

The five major record labels are coming back with pay services on their own reliable servers, but are music fans ready to pay for online play? The dot-com models deem it the only sustainable model nowadays, but you can't force community. You can't shoehorn success. Napster died lonely, but it didn't die alone.

Rick Aristotle Munarriz loves music. He loves to play and compose music, too. As a matter of fact, his band was once signed to Sony's Columbia Records label. His band -- Paris By Air -- has music on Napster as well as MP3.com. Rick's stock holdings can be viewed online, as can the Fool's disclosure policy.

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