Report: Post-Napster World Takes Shape

The number of Americans using file-swapping sites like Morpheus rose by 492 percent between March and August, from 1.2 million to 6.9 million users.

Meanwhile, Napster -- where file-swapping was suspended by court order, but where it is still possible to organize and play music files -- saw 5.5 million unique users in August, down from 10.8 million in March, Jupiter said.

Word of Mouth

"Word of mouth is driving a new round of exponential growth for next-generation file-sharing services, despite fragmented audiences," said Jupiter senior analyst Mark Mooradian. "As the larger alternatives gain scale, the value of their networks will increase in the form of greater breadth and bandwidth of content."

Jupiter, which issues monthly rankings of Web site use, said that Morpheus has emerged as the most popular of the file-sharing alternatives, with a 186 percent increase in use between June and August. Morpheus, the report said, had 2.3 million unique users in August, up 186 percent from June.

Kazaa.com was the second most popular swap site, with a 157 percent rise in users to 1.3 million, followed by WinMX, with a 91 percent increase to 1.2 million.

Aimster was fourth, gaining 74 percent in use to 927,000.

Younger Fans

The new services also appeal to younger audiences than Napster, whose audience, Jupiter said, has "come closer to resembling the overall online population."

The bulk of alternative-site users -- 43 percent -- are males 18 and over, while 31 percent of the audience for these sites is between 12 and 17 years old.

Among the four top file-sharing sites, Aimster had the youngest audience, with 41 percent of its fans between 12 and 17 years old. Morpheus, by contrast, appeals to an older group, with 47 percent of its users males 18 and over, the research firm said.

Fight the Power

"The Media Metrix ratings indicate that a strong fan base still exists for file-swapping services," said Charles Buchwalter, vice president of media research at Jupiter. "While Napster has been on the decline, users have been flocking to the new alternatives."

Recording companies are trying to stop that trend, and are planning their own, subscription-based, online music-transfer services. The record labels are also working on manufacturing CDs that cannot be copied.

Lawsuits Mount

Aware of the threat that free downloads pose to their businesses, the music labels have also gone to court seeking to shut down three of the alternative file-transfer sites.

Earlier this month, Morpheus, Kazaa and Grokster were hit with a copyright-infringement lawsuit, which was filed by a group of record companies and music studios, including subsidiaries of AOL Time Warner (NYSE: AOL).

Last month, Napster settled a class-action suit brought by a group of recording companies, agreeing to pay US$36 million to pave the way for its relaunch as a paid service.

Tuesday, the Recording Industry Association of America (RIAA), the National Music Publishers Association (NMPA) and its Harry Fox Agency (HFA) licensing arm announced an agreement to facilitate music subscription services on the Internet. The agreement requires a mechanical license that will allow subscription services such as AOL Time Warner's MusicNet and Vivendi's Pressplay to reproduce and distribute titles from RIAA members.