it’s pretty simple, and the economist hits the nail on the head:

“For many of Napster’s users, the main benefits of its file-swapping
service are that it provides music conveniently and for free. Some
people will be prepared to pay for the convenience and for good
quality downloads, provided the price is right. That means the
main challenge facing Bertelsmann and Napster is to produce a
paid-for service which people would rather use than free sites
which could copy Napster. Some of these other file-swapping
services will be harder to police. Services such as Gnutella and
FreeNet allow the swapping of music files between personal
computers but without the use of a central service, like Napster’s.
This makes it much more difficult for courts and regulators to act
against them. By teaming up with Napster, Bertelsmann has
accepted the inevitable: Internet distribution of music is here to
stay and likely to grow enormously. But the deal does not mark the
end of the music industry’s piracy problem. Music companies now
have to show they have more to offer customers than free
web-based services.”

even the new york times likes the deal.

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