Thursday, Jul 24, 2008
Attorney-turned-interim CEO Hank Barry promises to make money, not war, for the beleaguered music-swapping service.
May 30, 2000 | For Napster, things are happening on true Internet time. It was less than a month ago that I interviewed then CEO Eileen Richardson, as the little company with a huge fan base faced several high-profile lawsuits and the challenge of surviving on a shoestring budget. But just like that, Napster suddenly has $15 million in its back pocket, and a new CEO who's not only determined to make the service profitable but appears ready to use his prestigious legal background to befriend the recording industry, not fight it.
Who is Hank Barry? What can this lawyer turned venture capitalist turned CEO bring to a company that is wildly popular but under duress from musicians and record companies for offering a free, downloadable application that lets users temporarily turn their computers into servers for the purpose of swapping MP3 files?
Well, he's probably not your typical Napster user. In fact, he hadn't even heard of the service until about eight weeks ago, when his wife pointed out an article about it in Newsweek. But that doesn't mean he can't do the company some good. In addition to the $15 million in venture funding from Hummer Winblad, Barry brings to the San Mateo, Calif., company some of what it probably needs most -- legal expertise. A graduate of Stanford Law School, where he won a national prize for a paper on copyright law, Barry was previously a partner at high-tech powerhouse Wilson Sonsini Goodrich & Rosati; prior to that, he headed up Cooley Godward's Technology Practice Group in Palo Alto, Calif. He started down the V.C. road in September, after joining Hummer Winblad.
All this experience surely bodes well for Napster as the company responds to lawsuits brought by the Recording Industry Association of America, Metallica and Dr. Dre. But the real question is, Can he turn the company into a moneymaking venture while maintaining the loyalty of its fans?
Napster has risen quickly and endured much criticism, but the service has largely remained the same since Shawn Fanning first wrote the software in his dorm room at Northeastern University. What, if anything, are you going to do differently?
In terms of big differences, I want to build a bridge over to the record companies and to all the other constituencies to see if we can find a way to all work together. The business model of Napster has been evolving in response to the requirements of all these various constituencies -- the musicians, the managers, the record companies, the music publishers, the people who use Napster on a regular basis. There are many different people who are involved around the Napster technology. But I'm going to focus most of my time and energies on making sure we have a model that works.
We're also facing a lawsuit where we've got the largest law firms in the United States lined up against us, and we need to respond to that. And we'll continue to do that.
As long as you've brought up the business plan, what exactly is it?
Well, most businesses that are successful have revenues. So we need to have revenues.
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