Enthusiasm for file sharing over the Internet seems to have waned since the closure of the Napster music-sharing service in July, with a 50 per cent drop in usage since then, claims a Jupiter MMXI Europe report.

Napster remains the most popular music destination, said Jupiter analyst Mark Mulligan, despite the fact it has not been operating since July due to continuing copyright-based legal proceedings, and despite the availability of competing file-sharing services.

The number of visitors to Napster's site, and the people who use the application to manage their own, already-stored music collections, are "testament to the strength of the Napster brand," he said. Also to the way it expanded from its initial "college kid and techie" audience to become mainstream.

Other sites cannot compete in terms of content or ease of use, and are geared to a narrower audience, Mulligan said.

Bring the Webnoize Napster told Reuters it is delaying the launch of its new secure service due to difficulties in getting major record label content. This complaint has also been raised by other online music start-ups, and has become the focus of a US government anti-trust probe.

Napster CEO Konrad Hilbers delivered the keynote speech at Webnoize, an industry gathering. He revealed that Napster must license more music from major record labels before it can go back online, probably in the first quarter of 2002.

The US Department of Justice (DOJ) has booked meeting rooms at the event, which focuses on online music. The DOJ is attempting to establish contacts within the industry in order to assess how much influence the major record labels are trying to exercise over music distribution over the Internet.

Hilbers, formerly of major music business Bertelsmann, said: "The government must help establish a competitive environment that lets new ideas and firms flourish."

File sharing remains popular. 4.5 million people across Europe regularly swap files, claims Jupiter's report. However, the user base is now spread across a larger number of Web sites and services.