Napster deal may hit sour note with users

Napster has provisionally agreed a licensing deal with three of the world's biggest record labels, possibly salvaging its controversial business model, but users may well be unimpressed.

The company has made a tentative arrangement with MusicNet, the online music portal of record companies AOL/TimeWarner, Bertelsmann and EMI Group.

MusicNet would become the exclusive supplier of major-label music to Napster's service. Users would pay a monthly fee to access Napster's database, which is expected to contain only songs from independent labels. Then users could pay another fee for access to MusicNet's content.

But record executives from the companies backing MusicNet cautioned that, even under the new deal, Napster must transform itself into a legal service before it can access their music.

A statement released by AOL/TimeWarner, EMI, and Bertelsmann's MusicNet venture with RealNetworks, said the companies will "permit their content to be delivered to Napster at such time as Napster is operating in a legal, non-infringing manner and has successfully deployed a technology that accurately tracks the identity of files on the service".

Phil Leigh, internet, digital and new media analyst at Raymond James & Associates, says the deal will probably disappoint fans of the service.

But he added: "The significance of this move is that it shows at least three of the major companies have crossed the Rubicon. It is still a good deal for Napster."

See also:

Music downloads on the rise

Peer-to-peer problem to persist for recording and motion picture industries  07 Sep 2001

Napster: A musical revolution online

Napster, the website, was built as a central host for users wishing to swap MP3 music files. It has sparked an almighty legal battle over its legitamacy and has changed the way people obtain music.  01 May 2001

Napster moves to protect copyright

Bertelsmann, the German entertainment giant that is working with Napster, has announced that the music download company will use its digital copyright protection technology.  17 Feb 2001

Napster fears closure

Napster has warned that yesterday's court ruling that it must stop its users from swapping copyrighted music files would lead to the closure of the site and has vowed to continue fighting its wider legal battles with the music industry.  13 Feb 2001

Napster signs European indie giant

Europe's largest independent record company, edel, has signed with Napster and Bertelsmann to allow its music to be traded through Napster's fee-based service.  03 Jan 2001

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