Napster Inc, a music-swapping Web site that was sued by record labels including Bertelsmann AG, named former Bertelsmann executive Konrad Hilbers chief executive, to succeed interim CEO Hank Barry.
Hilbers was chief administrative officer of Bertelsmann's music division, BMG Entertainment, which agreed last year to license music to Napster. Barry, who had served as chief executive since May 2000, will remain on the board Napster said in a statement.
Napster is trying to transform itself into a subscription-based business, where customers pay instead of swapping songs for free. Music sales over the Internet are expected to rise to US$6.2 billion in 2006 from US$1 billion this year, according to Jupiter Media Metrix Inc, an Internet research company.
"I'm convinced the Napster brand name cannot be killed in the short term," Hilbers told a Jupiter Media online-music conference in New York. Customers "will pay and stay. It'll be imperative for us to get to critical mass again," he said.
AOL Time Warner Inc, Sony Corp, Bertelsmann, EMI Group Plc and Vivendi Universal SA sued Napster in 1999, saying it facilitated copyright infringement by users who downloaded billions of songs without paying a dime. A federal judge in March forced the company to adopt screening technologies that made it difficult for users to find copyrighted music to swap.
"We're seeing 800,000 [people] logging onto the servers every day, even today when they can't share files," Barry, the former CEO, told the conference in New York. "We hope these people will form the core of our customer base when we start the [subscription] service."
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