In June of last year, the University of Washington signed a deal with Napster to offer its dormitory students access to Napster's digital music service. The UW agreed to pay Napster $2 per month for each of 1,500 students, which over an eight-month school year came to $24,000.
The UW also agreed that it would shill for Napster and Dell, a third party in the deal, during the school year. The school said it would promote Dell and Napster in e-mail campaigns and on campus. It even agreed to coordinate student focus groups about the service and participate in a case study that Dell would publish on its Web site and in other marketing materials.
The partnership would only last a year. The UW has dropped Napster for the free services of Cdigix, a company that moved from Colorado to Seattle this summer after former RealNetworks executive Larry Jacobson took the helm.
The UW will offer students a music subscription service through Cdigix starting this fall. Jacobson said that unlike Napster, Cdigix isn't charging the UW because it will fund the service through advertising.
Cdigix is looking to be in 100 schools by the end of the year. Napster, by the way, has hired a bank to help it consider "strategic alternatives" -- code for shopping itself around to buyers.