Napster dispute fuels online music boom

The controversy surrounding song-swap software Napster has been linked with a huge surge in the number of web surfers visiting online music sites.

The number of adults going online to access music-related content increased by almost half since the start of the year, according to Cyber Dialogue, a New York-based marketing company.

"When combined with a marked increase in online music offerings and the proliferation of file sharing software Napster, Gnutella and MP3, the increase in demand for online music makes perfect sense," said Peter Clemente, vice president at Cyber Dialogue.

The findings are corroborated by separate reports from home-use internet audience monitoring company Net Value, and by US analyst Jupiter Communications.

The Net Value research shows that traffic to the Napster website has increased fivefold from the start of the year in the US. In the UK, its popularity has exploded since April, and it is now the UK's forty-second most visited site among home users - no mean achievement in a Top 50 dominated by web portals and ISP websites.

The surge in traffic to the Napster site coincides with a series of legal spats with recording artists such as Dr Dre and Metallica, culminating in the filing of a lawsuit by the Recording Industry Association of America (RIIA). The lawsuit calls for much of Napster be shut down.

Filed last month and scheduled to be heard on Wednesday 26 July, the lawsuit alleges that Napster is breaching copyright and harming CD sales, citing research which shows a decline in record sales in college areas with high Napster use. A similar motion was filed in New York yesterday against Scour.com, which includes a feature that allows users to trade music and film files that they keep on their computers.

Aram Sinnreich, an analyst with Jupiter, said: "Because Napster users are music enthusiasts, it's logical to believe that they are more likely to purchase now and increase their music spending in the future. Napster usage is one of the strongest determinants of increased music buying."

Sinnreich also said the RIAA's argument is flawed. "An inherent flaw in the RIAA's argument against Napster is it did not clarify that the most attrition took place before Napster's launch, and the analysis did not account for channel shift to online transactions that would have occurred independent of Napster's existence."

Focus now turns to a San Francisco district court for Wednesday's hearing in what has been billed as the first major battle over how intellectual property-rights are treated on the internet.