October 26, 2002
A Delaware bankruptcy judge has approved a $200,000 emergency loan to Napster from a company called Napco Acquisition in order to keep the company alive until the sale of its assets is completed. This curious change of events follows only weeks after the judge ordered Napster closed and blocked a similar loan from Bertelsmann AG that would have led to a sale of the old file trading company to Bertelsmann.

The key factors include Napco's signing a letter of intent to buy some of Napster's assets. Napco is a "mystery buyer" and it's ownership won't be revealed until after the sale is complete. Dozens of other bidders have also expressed an interest in buying the assets of the pioneer online music-swapping service.

Preliminary terms call for the bidder to pay $5 million in cash and an undisclosed amount of other consideration to Napster's creditors in exchange for some of the Redwood City, California-based company's assets.

It is terribly clear that although the RIAA and major record companies remain totally clueless about the future of music reproduction, virtually everyone else sees the Napster franchise as a future gold mine. If an owner can keep the service, name and structure alive until the inevitable industry seed change occurs, the future could be very bright.

Separately, Listen.com announced changes in their service which will allow downloading and burning of CD's at $0.99 a track. Although most experts believe that price is a little too high, clearly it is a major move in the correct direction.

Listen.com has cut a deal with two of the five major record labels to allow CD burning in it's Rhapsody Music Service. Previously Rhapsody offered only the industries bizarre streaming audio, meaning that users could listen to music only at their PCs.

"We've always planned on doing this. We've always wanted to allow people to take their music with them," says Matt Graves, a spokesperson for Listen.com. "Our first goal was to build up our catalog of music, and we did that by becoming the first service to sign deals with all five major record labels. Now, we're going back to those music labels and trying to get permission to offer CD burning."