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Napster's Immediate Future Unclear As CEO Steps Down

Company still doesn't know when file transfers will resume.

NEW YORK — Although Napster continues to promise the launch of a new subscription service by the end of the summer, the company's immediate future remains unclear.

A recent court ruling paved the way for the system to resume some song transfers, but Napster has not yet decided whether it will turn its existing system back on or wait until the subscription service starts, executives said Tuesday (July 24) at the Plug.In online-music conference.

Napster interim CEO Hank Barry used the event to announce he is leaving his position. He will be replaced by Konrad Hilbers, a former executive at Bertelsmann AG — the parent company of record company BMG — which formed an alliance with Napster last year.

Napster has been down since July 2, when the company said it was halting file transfers in order to solve problems with the database behind its new filters, which use acoustic fingerprinting technology to identify songs by their musical content.

Earlier this month, U.S. District Judge Marilyn Patel ordered Napster not to turn its system back on until it could prove its filters are 100 percent effective. But an appeals court quickly overruled the order and will weigh whether or not to reinstate it (see [article id="1445269"]Napster Cleared For Takeoff (Again) After Shutdown Order Overturned"[/article]).

Even though Patel's order is no longer in effect, Barry said Napster is intent on improving its filtering system and won't allow any more transfers on until it does so.

"We have to impose a higher standard on ourselves," he said.

Hilbers, the new CEO, expressed confidence in Napster's ability to revive itself with its subscription service. Even before this month's shutdown, the number of songs available on Napster had drastically declined since February, when Patel ordered Napster to screen out copyrighted songs cited by rights-holders.

"I'm convinced that the Napster brand name cannot be killed," Hilbers said.

The company's subscription service will offer access to a set amount of indie-label content for a still-undetermined monthly fee. If Napster users pay extra, they will also get access to the subscription service MusicNet, which will offer songs from three major record companies as well as super-indie Zomba (see [article id="1445382"]"Britney, 'NSYNC, Tool Music To Be Legally Available Online"[/article]).

Barry again promised that the new Napster will be available by the end of the summer — but he also suggested that by "summer" he may really mean "fall."

"I'm learning more about Indian summer," he said.

(For complete coverage of the Napster saga, check out MTV News' [article id="1441231"]"Napster Files."[/article])

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