Reborn Scour aims to surf second online music wave

With Napster struggling for survival, one online music rival is getting ready for a reincarnation of its own.

With Napster struggling for survival, one online music rival is getting ready for a reincarnation of its own.

In 1999, with the financial backing of Hollywood heavyweight Mr Michael Ovitz, Scour.com was touted as a "Napster with movies".

The buzz did not last long and the company, threatened with a $250 billion (€280 billion) lawsuit by the entertainment industry, was forced to shut down its service, file for bankruptcy and sell its assets.

The service is now being resuscitated with the aid of CenterSpan Communications, a peer-to-peer technology company that bought the Scour brand and its list of 4.5 million registered users.

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"Napster and the old Scour were the first wave of technology companies - they are bodies on the beach," says Mr Frank Hausmann, CenterSpan's chairman and chief executive. "We are the second wave."

Mr Hausmann is nothing if not ambitious.

"Sixty-four million Napster users are not just going to suddenly switch off their computers and put their hands in the air," he says. But those users might not be reaching for their wallets, either.

About 75 per cent of consumers who have downloaded music in the past say they would be unlikely to pay to download music in the future, according to a Forrester Research study.

Besides convincing users to pay for a service that they are accustomed to getting for free, the new Scour will have to win the rights to an extensive library of copyrighted music if it hopes to meet the demand that Napster has generated and beat the competition. Those competitors are likely to include a revamped Napster, backed by BMG, and online music services produced by the top music labels. "The demand seems to be there but the premium content needs to be compelling," says Ms Jennifer Jordan, a senior equity analyst at Wells Fargo Van Kasper.

CenterSpan says it will unveil a test version of its "legitimate" Scour before the end of this month. The introduction of the full commercial service is due between July and September. The service uses Microsoft's digital rights management software and will sell users access to music, video and images.

CenterSpan says the model will be similar to a tiered cable subscription service, with monthly subscriptions from between $4.99 per month for basic service to $24.99 per month for premium service.

According to Forrester Research, music downloaders would be willing to pay an average of $5.28 per month and 58 cents per song.

Scour will also carry some free content and, like Napster, let artists use its network to distribute their work, circumventing the major record labels.

Still, even CenterSpan's chief executive acknowledges the fundamental question facing Scour and its competitors: will people pay for online music?

"The story starts and ends with the particular music they can get licences for, and their ability to create a marketing story that explains why consumers want that particular music," said Mr Eric Scheirer, a media analyst at Forrester.

So far, CenterSpan has refused to comment on how many or which licensing agreements it has made for Scour's introduction.

But Mr Hausmann contends that the recording industry has two reasons to provide Scour with content: the promise of a secure and legal Internet distribution service, and what he calls Scour's compelling business model. Mr Hausmann adds that record labels, besides generating revenue through licensing agreements, would benefit from Scour's access to customers.

Even if Scour makes the deals, it will have to justify the difference between something you can get for free and something you pay for, explains Mr Aram Sinnreich, a senior analyst at Jupiter Media Metrix. "If they don't come out of the gate with a service that is easy and fairly comprehensive, they will most likely fizzle and fade away," he says.