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Napster and BMG ink deal Print E-mail
Wednesday, 01 November 2000
Napster, the world's most infamous music file-swapping service, inked a strategic alliance with German media conglomerate BMG (Bertelsmann Music Group).

The deal calls for BMG to help develop and finance a pay model for Napster, according to The Hollywood Reporter. The lawsuit with Napster vs. all of the major labels still stands. BMG is included as a plaintiff. BMG is waiting for Napster to actually implement a "legitimate" business model. "We welcome anyone's decision to become a legitimate player in the online music industry, building a business based on licensed uses of copyrighted works," says Hillary Rosen, CEO of the RIAA. Clearly, the pressure is on the RIAA to find a way to make Napster and the other file-sharing services comply with a format that pays the musicians and songwriters. Napster is under even more pressure from a huge multi-plaintiff lawsuit that realistically threatens to close down their entire operation.

Millions of music fans have sided with Napster as a way for "the people" to get the music they want, when they want it, for free. Bands like Metallica, fronted by drummer Lars Ulrich, have seriously damaged their huge fan base by coming out against Napster, while other bands like Limp Bizkit and The Offspring embrace Napster as a marketing tool to promote their records before their releases. Limp Bizkit's new album Chocolate Starfish and The Hotdog Flavored Water became the third-highest selling record in its first week of release, with over 1,060,000 copies sold (according to Billboard - Soundscan) even after the band publicly supported Napster.

Napster is going to have to find a way to pull its ass from the fire. Doing deals with the majors to develop a pay model is likely to be the only way that they can get out of the lawsuit. The hard reality is that if Napster wasn’t free, it wouldn’t have nearly the user base that it does and wouldn't have become the social phenomenon that it currently is. Right now, Napster can not be denied, but it is going to have to change to play more by the rules. In the end, consider Napster to be an application that you downloaded a free trial of - and really liked. Is it worth, say, $10 a month for downloading MP3s? You bet!

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