# How does Napster make money? **URL:** \ **Category:** Factual Questions\ **Created:** [November 1, 2000, 6:35am UTC](https://boards.straightdope.com/t/how-does-napster-make-money/39206 "2000-11-01T06:35:04Z")\ **Posts on this page:** 13\ **Page:** 1
**Author:** ![IBBen](https://avatars.discourse-cdn.com/v4/letter/i/85f322/32.png) [@IBBen](https://boards.straightdope.com/u/IBBen)\ **Post date:** [November 1, 2000, 6:35am UTC](https://boards.straightdope.com/t/how-does-napster-make-money/39206/1 "2000-11-01T06:35:04Z")
Anyone know? Is it a stock market thang? Napster certainly doesn’t have banner advertising. What gives? ---
**Author:** ![Walloon](https://avatars.discourse-cdn.com/v4/letter/w/fbc32d/32.png) [@Walloon](https://boards.straightdope.com/u/Walloon)\ **Post date:** [November 1, 2000, 7:03am UTC](https://boards.straightdope.com/t/how-does-napster-make-money/39206/2 "2000-11-01T07:03:59Z")
Having outside advertisements would make the Napster operation a “commercial” venture, which would weaken its case in court that it is only abetting file sharing, not making money off it. But I am as puzzled as you about where their revenue comes from to pay the salaries (several dozen employees), the lawyers, the hardware servers, the office space, etc. A friend who follows dot.coms says that investors have been so overeager to get into dot.coms from the ground floor that they are willing to take the risk. But says I, what risk? Without a promise of return on investment, it’s not a risk, it’s a black hole where your investment goes, never to return. ---
**Author:** ![Lawmill](https://avatars.discourse-cdn.com/v4/letter/l/ecc23a/32.png) [@Lawmill](https://boards.straightdope.com/u/Lawmill)\ **Post date:** [November 1, 2000, 7:21am UTC](https://boards.straightdope.com/t/how-does-napster-make-money/39206/3 "2000-11-01T07:21:30Z")
Hank Barry(CEO) and Shawn Fanning(Founder) talked to my Econ class for about an hour a few weeks ago. Here’s the basic gist: A Venture Capital firm is funding Napster right now, somewhere in the area of $12 million IIRC. Hank Barry works for the VC and Napster apparently accepted him as CEO when they decided to accept the money. He said that he feels that Napster will be a profitable business in the future(he should hope so), hence the funding. His main proposal was to charge a monthly fee to use Napster. $5US/month was the term he threw out. Interestingly enough, he said that they’re paying a huge amount in legal bills, $3 million a month? As a previous poster mentioned, advertising would make Napster something that had a chance of actually making money, and might hurt its image as an “innocent tool of the people”. ---
**Author:** ![Tapioca\_Dextrin](https://avatars.discourse-cdn.com/v4/letter/t/3d9bf3/32.png) [@Tapioca\_Dextrin](https://boards.straightdope.com/u/Tapioca_Dextrin)\ **Post date:** [November 1, 2000, 8:01am UTC](https://boards.straightdope.com/t/how-does-napster-make-money/39206/4 "2000-11-01T08:01:32Z")
You could try [or [url="[http://boards.straightdope.com/sdmb/showthread.php?threadid=35951](http://boards.straightdope.com/sdmb/showthread.php?threadid=35951)"this one]([http://boards.straightdope.com/sdmb/showthread.php?threadid=44531](http://boards.straightdope.com/sdmb/showthread.php?threadid=44531)"this discussion[/url) both of which had exactlty 😉 the same title as your thread. ---
**Author:** ![Geek\_Mecha](https://avatars.discourse-cdn.com/v4/letter/g/ecae2f/32.png) [@Geek\_Mecha](https://boards.straightdope.com/u/Geek_Mecha)\ **Post date:** [November 1, 2000, 8:44am UTC](https://boards.straightdope.com/t/how-does-napster-make-money/39206/5 "2000-11-01T08:44:12Z")
Check this out: \*\*Napster to Develop Fee Service \*\* [http://www.wired.com/news/business/0,1367,39891,00.html](http://www.wired.com/news/business/0,1367,39891,00.html) ---
**Author:** ![handy](https://avatars.discourse-cdn.com/v4/letter/h/b5a626/32.png) [@handy](https://boards.straightdope.com/u/handy)\ **Post date:** [November 1, 2000, 4:12pm UTC](https://boards.straightdope.com/t/how-does-napster-make-money/39206/6 "2000-11-01T16:12:58Z")
Napster doesn’t make money! ---
**Author:** ![vandal](https://avatars.discourse-cdn.com/v4/letter/v/858c86/32.png) [@vandal](https://boards.straightdope.com/u/vandal)\ **Post date:** [November 1, 2000, 6:43pm UTC](https://boards.straightdope.com/t/how-does-napster-make-money/39206/7 "2000-11-01T18:43:58Z")
> [@](#): > > \*Originally posted by Colin Wilkinson \* > **You could try [this discussion](http://boards.straightdope.com/sdmb/showthread.php?threadid=44531) or [this one](http://boards.straightdope.com/sdmb/showthread.php?threadid=35951) both of which had exactlty 😉 the same title as your thread.** And what’s even more erie is that they have the same number of replies! ---
**Author:** ![Zenster](https://avatars.discourse-cdn.com/v4/letter/z/cdc98d/32.png) [@Zenster](https://boards.straightdope.com/u/Zenster)\ **Post date:** [November 1, 2000, 7:00pm UTC](https://boards.straightdope.com/t/how-does-napster-make-money/39206/8 "2000-11-01T19:00:52Z")
By selling a chunk of their company to one of the organizations (Bertelsmann) that is sueing them in court. That’s how. For more information please see [this](http://news6.thdo.bbc.co.uk/hi/english/business/newsid_1000000/1000463.stm) article in the BBC news. Be sure to click on some of the links in the menu at the bottom of the page for more information. ::furiously downloads more favorite tunes:: ---
**Author:** ![tshirts](https://avatars.discourse-cdn.com/v4/letter/t/839c29/32.png) [@tshirts](https://boards.straightdope.com/u/tshirts)\ **Post date:** [November 1, 2000, 7:57pm UTC](https://boards.straightdope.com/t/how-does-napster-make-money/39206/9 "2000-11-01T19:57:25Z")
I’m going to shamelessly restate my 8/6/00 Great Debates thread here, where more Napster users will see it. \*\* [I think there is a way to end the Napster problem, and it has worked with song lyrics](http://boards.straightdope.com/sdmb/showthread.php?threadid=33602)\*\* > [@](#): > > _Originally posted by tshirts 8-6-2000_ > The problem with lyrics was solved after a protracted legal wrangle with this answer: > > Someone responsible to the song industry, ASCAP, took over the rights problem from [http://www.lyrics.ch](http://www.lyrics.ch) > > They restrict the downloading of lyrics to non-permanent means. Then, they are essentially PROMOTING the industry, and providing a way to buy legal copies of the lyrics, with the money going to the authors. > > Napster could do the same thing. Rare works could be heard, at least as samples, and then bought direct from the studios. > > This becomes a way to A) find rare songs, and still B) provide recompence where due. > [@](#): > > _Originally posted by tshirts 11-1-2000_ > **Well, was I right or was I right?** > > Today’s Business headline in the Oakland Tribune: > _ **Napster agrees to pay artists** _ > > Not that it took to much for me come up with a solution that’s as old as “if you can’t beat them, join them”, or perhaps “thesis, antithesis, synthesis”. > > As one of those Napster users who only goes after songs that are old and rare, I’m just grateful that Napster wasn’t shut down. I’d have gladly paid for everthing I’ve downloaded, but it was always unavailable in stores. ---
**Author:** ![RealityChuck](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/realitychuck/32/195_2.png) [@RealityChuck](https://boards.straightdope.com/u/RealityChuck)\ **Post date:** [November 1, 2000, 11:33pm UTC](https://boards.straightdope.com/t/how-does-napster-make-money/39206/10 "2000-11-01T23:33:33Z")
If Napster evolves into a fee-charging service, they solve two problems – they have an income stream and they can pay for the rights to the songs. It’ll be a good situation for everyone. Napster was floating a $5 a month fee, which would make it affordable. Of course, it doesn’t answer the bandwidth issues. Napster is a hog, and will always have that problem. ISPs will eventually have to begin throttling use to make sure their system isn’t overloaded. ---
**Author:** ![Brainz](https://avatars.discourse-cdn.com/v4/letter/b/d9b06d/32.png) [@Brainz](https://boards.straightdope.com/u/Brainz)\ **Post date:** [November 2, 2000, 3:54am UTC](https://boards.straightdope.com/t/how-does-napster-make-money/39206/11 "2000-11-02T03:54:22Z")
For your information…Napster is right on schedule. Soon to be the largest music distributor on earth funded by monthly subscription. Already loaded and in use on most potential customer computers, the competition will never catch up. Directv did this letting hundreds of thousand systems operate with the pirated access card. Directv had to pay no one for programming, but when they finally pull the switch on the fixed cards, wala who’s system is in place ready to start collecting for programming… ---
**Author:** ![CurtC](https://avatars.discourse-cdn.com/v4/letter/c/ce73a5/32.png) [@CurtC](https://boards.straightdope.com/u/CurtC)\ **Post date:** [November 2, 2000, 5:39am UTC](https://boards.straightdope.com/t/how-does-napster-make-money/39206/12 "2000-11-02T05:39:55Z")
Napster makes money the same way that 95% of Internet companies make money - from their investors. Same way with Amazon - they lose money with every book that they ship, but the investors poured enough money into them to make up for it. What I’m not clear about is how the investors expect to get their money back - do they think the people who bought books are going to return some money to them? ---
**Author:** ![handy](https://avatars.discourse-cdn.com/v4/letter/h/b5a626/32.png) [@handy](https://boards.straightdope.com/u/handy)\ **Post date:** [November 2, 2000, 3:59pm UTC](https://boards.straightdope.com/t/how-does-napster-make-money/39206/13 "2000-11-02T15:59:22Z")
CurtC, I saw the kid who started Napster on the news & he said it doesn’t make money.