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Senator, Analysts Blast Napster Clones

11 Mar, 2002 By: Thomas K. Arnold

SAN FRANCISCO — In a move film studios are watching closely, Wall Street analysts and Sen. Orrin Hatch — the former chairman of the Senate Judiciary Committee and a key figure in the congressional debate over the digital distribution of music — blasted , the two record company attempts to tap into the burgeoning digital download market.

Speaking today at the 44th annual NARM Convention, Hatch, the Senate's ranking Republican, said he does not favor compulsory licensing "at this time."

But if the five major record companies behind MusicNet and PressPlay don't develop licensing programs of their own, the senator said, he could very well change his mind.

The major record companies made a mistake in killing Napster and launching their own proprietary digital downloading ventures, Hatch said later.

"They should have copyrighted Napster and [capitalized on] that brand that young people know," he said. "Now they're all trying to develop their own form of Napster and having a terrible time of it."

Hatch called MusicNet and PressPlay "a great attempt to legitimize Napster," but added, "unless they also license music to others, then I think it's wrong. It's abusing the process."

Hatch's comments were similar to those expressed by Wall Street analysts at a seminar called "Taking Stock of Entertainment's Future."

Harold Vogel, of Vogel Capital Management in New York, said he doesn't think MusicNet or PressPlay will succeed because they don't let consumers own the music outright. Access to music is only available as long as consumers pay for a subscription.

"PressPlay and MusicNet want you to go from purchasing to renting music, and that's not going to work," he said.

Michael Nathanson of Sanford, Bernstein and Co. was more blunt: "The record companies don't know what the hell to do."

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