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The Honolulu Advertiser
Posted on: Wednesday, June 6, 2001

Napster strikes deal with three top labels

Associated Press

SAN FRANCISCO — Napster, the former music industry bad boy, said yesterday it has struck a distribution deal with three major record labels that are launching a music subscription service this summer.

The agreement between Napster and the members of MusicNet is the biggest step Napster has taken so far toward legitimacy.

MusicNet is a venture between record label owners AOL Time Warner Inc., Bertelsmann and EMI Group, as well as Seattle-based RealNetworks, whose software allows users to listen to music and watch video via streaming technology over the Internet.

The deal makes Napster the third distribution partner for MusicNet, joining AOL RealNetworks and America Online. The MusicNet subscription services is to be available to consumers by late summer.

Napster CEO Hank Barry promised the new Napster service would not deal in trafficking unprotected music files, and would instead rely on technology to protect and track the ownership of songs.

MusicNet would require an additional fee from Napster users, on top of a separate subscription fee. Napster's basic subscription service would provide only independent-label music.

Members of the new Napster Service who subscribe to the MusicNet offering through Napster will be able to share MusicNet content with other subscribers. But parties to the deal haven't said whether people will be able to download, collect and trade MP3 files as they do on Napster, a popular activity that has infuriated music copyright holders.

MusicNet's online subscription music service will let music fans listen to songs piped over the Internet for a yet-to-be-determined fee.

Napster, which still is being sued by the music industry for copyright infringement, has been trying to purge copyright-protected music files from its system under a court injunction. But a technical solution that satisfies the music industry's copyright protection concerns so far has proved to be elusive.

Warner Music Group issued a statement yesterday indicating that there could still be serious hitches in the deal.

"As previously announced, our content will not be available to Napster as part of the MusicNet service until we are reasonably satisfied that 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," Warner said in a statement.