Napster nears deal with major music publishing agency
Taking another step toward legitimacy, the embattled Napster online song-swapping service is poised to strike a sweeping licensing deal with the agency representing most U.S. music publishers, sources said.
The company could announce as early as Monday an agreement with the Harry Fox Agency, an arm of the National Music Publishers Association. The licensing deal would clear the way for Napster to launch a new, fee-based service that compensates artists, songwriters and labels when their works are copied.
A spokeswoman for Napster declined to comment, and officials at the Harry Fox Agency could not be reached. Terms of the deal were not available, nor was there any indication whether the deal would settle the publishers' copyright-infringement claims.
Napster faces the threat of huge financial penalties for violating the record industry's copyrights. Because consumers copied billions of songs through Napster's controversial free service, by some analysts' estimates, Napster could be wiped out if it loses the industry's copyright-infringement suit.
Napster suspended its free service in early July on the order of U.S. District Judge Marilyn Hall Patel, who ruled that the service was not doing enough to prevent users from violating the publishers' and record labels' copyrights. The publishers and the labels hold copyrights covering the Internet distribution of music.
The publishers have signed few licensing deals for on-line music services, in part because they have sought a larger piece of the financial pie than they've gotten from CD sales. Even the two services jointly owned by the major record labels--each of which is an affiliate of a leading music publisher--have been unable to secure the publishing licenses to the music they want to distribute.
Napster already has deals with some of the leading labels, but those will not take effect until the company replaces the free service with one that prohibits unauthorized copying. Company officials had promised to launch the new service by the end of the summer, but Friday the company said that plan had been pushed back until later in the fall.
Initially, the new Napster service is expected to offer music only from independent labels, and the songs could not be moved to portable players or recorded onto CDs. The new service eventually could include songs from major labels, provided it satisfies their security and accountability concerns.
