Napster to name new CEO

The music-swapping company is expected to name a new chief executive as early as Tuesday, sources say, bringing current CEO Hank Barry's tumultuous term to a close.

John Borland Staff Writer, CNET News.com
John Borland
covers the intersection of digital entertainment and broadband.
John Borland
4 min read
Napster is expected to name a new chief executive as early as Tuesday, according to sources close to the company, bringing current CEO Hank Barry's tumultuous term to a close.

A Napster representative refused to comment on the impending executive switch, which was first reported by CNET News.com.

Barry's replacement will be Konrad Hilbers, a former executive from the media company Bertelsmann, according to The New York Times. Neither Barry nor Hilbers could be reached for comment late Monday.

Barry joined Napster as "interim" head of the company 13 months ago, when venture capitalist firm Hummer Winblad invested $15 million in the burgeoning file-swapping company. In that time, the company became one of the most familiar names on the Internet and the standard-bearer of what many saw as a digital revolution--and ultimately the most visible symbol of that revolution's decline.

As a venture capitalist looking to create a profitable company, Barry himself was something of an accidental revolutionary. From his first moments in the company, he began appointing other executives with experience in the record business, hoping to build bridges to the recording industry.

But with a lawsuit threatening to put Napster out of business--and render Hummer Winblad's investment worthless--Barry quickly became one of the most prominent public defenders of the legal rights of file-swappers online. Although that position has been consistently battered in the courts, his defense has helped set the terms of debate for a whole generation of companies online.

"He has helped advance the thoughts of what copyrights mean in the digital age," said P.J. McNealy, an analyst with Internet research firm Gartner G2.

Barry's appointment marked the beginning of a second age at Napster, in which it was consistently torn between the demands of a growing fan base seeking unrestricted access to music, and the need to make money.

Under Barry's predecessor, Eileen Richardson, Napster had made little progress in building bridges with the recording industry or articulating a stable business plan, although the company already had attracted millions of users. Early court documents noted few successful attempts at finding revenue sources, such as striking an affiliate agreement with Amazon.com, although the need for funds was clear.

As an entertainment lawyer at Wilson Sonsini Goodrich & Rosati, Barry had previously served as counsel to Disney, A&M Records and Liquid Audio, among others. That gave him a better pipeline to the established record companies that were suing Napster than previous executives had held.

But initially, that led only to fruitless talks as the record industry's lawsuit against Napster gained ground. Indeed, attorney David Boies, who the company brought on board to defend the company in court not long after Barry's appointment, became as familiar a voice in the press as Barry himself.

Indeed, some former employees of the company have said that Barry and Hummer Winblad entered the game with too much confidence.

On a panel at the MP3.com summit earlier this month, former Napster marketing executive Liz Brooks joked that Napster should have been renamed "roadkill, or Hummerwinbladded. But I guess they're the same thing."

"Hummer Winblad was completely under the impression Napster would win the lawsuit," and so saw little reason to build immediate bridges to the record industry, Brooks said.

Barry's present and former peers in the industry say the job has been grueling. One current executive privately called Barry's position "the least fun" job in the industry.

"Hank fought the good fight, but the RIAA (Recording Industry Association of America) is a tough opponent," said Travis Kalnick, the former CEO of Scour, another file-trading company sued by the recording industry. "They not only destroy the enemy, but they scorch the earth where the battlefield took place."

The search for a new CEO has been ongoing since well before the beginning of 2001, sources have said.

But with a company whose future has been in increasing doubt in that time, progress in lining up a replacement has been slow. Making matters worse has been that Barry himself was personally named in one of the lawsuits charging Napster with copyright violations, although a federal judge was critical of the legal arguments.

Despite the company's problems, Barry successfully wooed German media giant Bertelsmann AG as an ally, surprising many in the music industry. With Bertelsmann's help, Napster still plans to launch a legal subscription service that offers people paid access to as much major-label and independent music as possible. That service is slated to launch later this summer.

The company's progressive moves toward the record companies--even if reluctant--have come at the expense of its users' loyalty. Recent studies from Jupiter Media Metrix and Nielsen NetRatings show a sharp decline in usage recently, as the company has taken ever more draconian steps to filter out works contested in lawsuits.

The service has been shut down since the beginning of the month, as the company works to streamline the latest version of its file-filtering system. Even when it has been operating lately, it has carried only a tiny fraction of the songs that made the Napster legend.