Will "free" music sell on campus?
Online music companies and record labels think they can neutralize piracy by offering college students a service that doesn't require them to shell out cash when they use it. The industry hopes it can make this kind of service a standard feature of campus life -- with the cost buried somewhere in student fees.
The first pool of subjects in the ivory-tower experiment will be 18,000 students who attend Pennsylvania State University, where Roxio Corp. plans to make its Napster service available in January. Students won't be charged directly, but part of the $160 technology fee they pay each semester will be funneled to Roxio.
The aim is to dull students' appetite for free songs from file-sharing networks such as Kazaa. In addition to tying up college computer networks, illegal downloads have put students in the cross hairs of lawyers for big entertainment companies and the Recording Industry Assn. of America. Facing a growing number of subpoenas and cease-and-desist letters, the schools are eager to put a lid on unauthorized downloading.
A few other schools, including the University of Rochester, are expected to launch similar online music efforts next spring. Some are likely to include a limited selection of movies as well as music in an attempt to defuse another motive for unauthorized downloading.
Among the companies wooing colleges are RealNetworks Inc. of Seattle, MusicMatch Inc. of San Diego and MusicNet, an online distributor owned by RealNetworks and three of the major music companies.
MusicMatch President Peter D. Csathy said there was a lot of confusion among colleges about what to offer, in part because online music services are still in their infancy. One answer, University of Rochester Provost Charles Phelps said, was to launch trials and see how students respond.
Phelps said he was still in talks with students, whose biggest concerns are how much their fees might increase and how broad the service would be. They are just starting to accept that a heavily discounted service won't give them the kind of permanent downloads they can get by file sharing, he said.
"They have a much more vivid understanding that the way things are today ... is flat illegal," Phelps said. "I think a lot of them kept hoping that that wasn't the case."
Industry-backed services on the Internet are user-friendly, but they can't match the breadth or flexibility of Kazaa and the other major file-sharing networks. And the endorsement they carry from the major record companies may alienate students who object to the industry's strategy of suing music fans.
"This is definitely a challenge for Napster," said Ian Rosenberger, a Penn State senior and president of the Undergraduate Student Government in College Station, Pa. "It's going to take some time to get students to feel good about this."
The online music services are asking for fees of $3 to $8 per student per month, said Norbert Dunkel, director of housing and residence education at the University of Florida in Gainesville.
Like many schools, Florida would tie the fees for such a service to campus housing charges.
But, Dunkel said, "students are so cost-sensitive today that it's very difficult for any of us to raise rents $30 or $40 a semester just to be able to provide an additional service.... That's difficult for us to grasp right now."
In the long run, the pilot programs are expected to matriculate to colleges and universities around the country, said Peter S. Fader, a professor of marketing at the University of Pennsylvania's Wharton School in Philadelphia.
"It's not going to be a matter of if; it's going to be a matter of which vendor to go with," he said.
Neither Penn State nor Roxio would disclose many details of their deal, including the amount of money the university will pay for Napster. Roxio is expected to charge Penn State a deeply discounted fee that covers every student, betting that only some of them actually will use it.
Students who live in the dormitories will be the first to gain access to the service, with all 83,000 students on and off campus becoming eligible in the fall. The free accounts will let students rent and play an unlimited number of songs that are tied to their personal computers. If they want permanent copies to burn onto CDs or transfer to an MP3 player, they'll have to pay 99 cents per track.
Penn State President Graham B. Spanier said he and other university officials talked to hundreds of students before striking the deal with Roxio. Nevertheless, some students protested the deal even before it was formally announced Thursday.
"I feel like I'm paying the RIAA," said Chad Lindell, a senior at Penn State's campus in Erie, Pa.
Lindell said he had been posting leaflets against the service, but they have been removed from campus almost as quickly as they go up.
Student body President Rosenberger said Napster was "definitely more usable than Kazaa," the file-sharing network against which Napster will be judged. But, he added, "the amount of songs is not where students want it to be."
Relaunched Oct. 29 as a legal online music service, Napster offers more than 500,000 songs to subscribers and to pay-as-you-go shoppers. It sold 300,000 tracks in its first week, compared with 1.5 million sold by the leading vendor of downloadable songs, Apple Computer Inc.'s iTunes Music Store, the same week.
The iTunes software is gaining ground on campuses in part because it allows students to share their music collections for free with other computer users on campus.
In effect, the software allows students to form file-sharing networks that permit listening to -- but not copying -- one another's collections.
And iTunes is likely to receive a boost next year from two brands popular with students: Pepsi and McDonald's. PepsiCo Inc. said its customers would be eligible to download up to 100 million free songs from iTunes, and the New York Post reported Thursday that McDonald's Corp. planned to give away up to 1 billion songs.