Bertelsmann deal helps Napster face music

Published Nov 2, 2000

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San Francisco - Napster's deal on Tuesday with one of five record labels suing it for copyright infringement could help the music-swapping service wriggle out of its legal straitjacket, but it remains unclear how the new partnership will work.

Also uncertain is whether Napster can turn a revolutionary free service into a profitable endeavour without alienating its 38 million users.

Under the deal, Bertelsmann's BMG music division said it was teaming with the Internet service to develop a secure, membership-based music distribution system that would guarantee payments to artists. Unresolved was how much a membership service would cost, and how Napster would begin to charge users for something the company had been giving away.

"How are they going to take the existing Napster environment and make it secure?" asked Ron van Zuylen, a California computer engineer and Napster user.

Under the deal, Napster gains the BMG catalogue, including artists such as Christina Aguilera and Carlos Santana. But it was likely those songs would contain technology to prevent them from being swapped for free.

"The artists will get paid. The label will get paid. Napster will get paid," said Talal Shamoon, of InterTrust Technologies, the company that provides the security technology for BMG. "What you have on Napster is akin to chaos."

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