Wired reports that a few Napster shareholders have filed suit complaining that Napster has been unable to compete with iTunes in part because at one point Napster used Microsoft's DRM to protect music tracks.
The Apple situation can be traced back to Napster's ill-fated embrace of Microsoft's DRM platform and Apple's refusal to license FairPlay and implement subscription-capable music DRM. Napster's subscription service can't compete fairly with iTunes and file sharing networks because iPods are currently incapable of playing music from any unlimited music subscription. Napster removed DRM from its single song downloads earlier this year, and now sells them in the MP3 format, which works with the iPod. But iPod owners still seem to be more likely to shop at iTunes, if they're buying music at all.
