Napster has entered into a research and development agreement with digital rights technology company Liquid Audio, Barry said at a conference here today. Napster is also examining several revenue models for the service, Barry said. The models aim to make the service still feel free but would generate revenues to sustain its business. Napster currently makes no money.
He also reiterated arguments that Napster is good for the music industry, despite concerns that it is siphoning untold sales from legitimate channels.
"This will take a $40 billion business and turn it into an $80 billion business," Barry said during a panel discussion.
Barry's arguments ran into a wall of skepticism from record label executives gathered here at the Jupiter Communications Plug.In forum, where the two sides only underscored the deep divide between them.
Keynote speaker Richard Parsons, president of Time Warner, drew a line in the sand over the alleged intellectual property threat of Napster's service, openly echoing the rhetoric of the Cold War.
"The music industry will pay any price, bear any burden, meet any hardship, support any threat, oppose any foe to protect the integrity of their copyrights and the copyrights of their artists," he said, borrowing excerpts from a speech by President John F. Kennedy.
Parsons, whose company owns Warner Music, flatly rejected the notion that making it easier to find and copy songs for free could help the industry. During his keynote, Parsons even compared file-swapping software to communism.
The comments came as the record industry pursues a series of high-stakes lawsuits targeting technology companies that offer consumers new ways to access music and entertainment over the Internet. Napster, MP3.com and Scour.net all stand charged with massive piracy violations stemming from their services.
In April, a judge found MP3.com guilty of copyright infringement over its My.MP3.com service, which gave CD buyers online access to digital copies of their legitimately purchased music. Damages have yet to be determined, but they could run into the billions of dollars. The company has since agreed to settle with several record labels and is in talks with others.
The record industry's case against Napster goes to trial Wednesday.
For his part, Barry stressed that Napster's technology "amplifies" the music business rather than hurts it. Sharing music files online will not cut into the music industry's revenues, he predicted, but instead will spark more purchases of CDs and other items produced by the labels. Last week, Jupiter Communications released a report that showed users of Napster and other file-sharing software are more likely to boost their music spending.