Media Firms' Shareholders Rejoice as Mighty Napster Is Felled

Memo to shareholders of the major media corporations fighting Napster in court: Your copyrights are safe.

In a court ruling issued Monday in the music-business-vs.-Napster case, an appeals court held that Napster users do appear to be committing copyright violations -- making this at least the second time that legal authorities have told Napster that it's just not right for 50 million strangers to be swapping copies of old Spike Jones records and Tiny Tim singles.

And that's good news for the publicly traded U.S. companies -- including Vivendi Universal's (V Quote) Universal Music Group, AOL Time Warner's (AOL Quote) Warner Music Group and Sony's (SNE Quote) Sony Music Entertainment -- who, fearing for the safety of the copyrighted music, movies, TV shows and books at the roots of their content businesses, have been trying to shut down the file-sharing-service-in-search-of-a-viable-business-plan.

The appeals court agreed with the lower court's ruling that Napster harmed the music business by reducing CD sales to college students, who presumably are using Napster over their schools' high-speed networks, and by making it harder for plaintiffs to introduce their own digital music businesses. Of course, there's "harm" and there's "harm," given the money that the record industry is making: Manufacturers shipped $5.7 billion worth of CD albums in the first half of 2000, up 9.9% from one year earlier, according to the Recording Industry Association of America. ...