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Napster Strikes Deal With MusicNet

© Portia J. Lino

On June 5, 2001, Napster joined forces with MusicNet, AOL, and Real Networks, as an official business partner. Napster, true to the old adage, “If you can’t beat em, join em,” made a deal with three record labels to license its songs. All in a legal manner of course.

BMG Entertainment, EMI Recorded Music, and AOL Time Warner’s Warner Music Group, all major backers of MusicNet, say they are willing to work with Napster to provide musical content assuming 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.”

Subscribers to the Napster/MusicNet service will be allowed to share MusicNet content with other MusicNet subcribers. The service is expected to take effect by late summer 2001.

This deal comes at a time when Napster is continuing to be riddled with lawsuits from record labels. The two parties met in U.S. District Court where Judge Marilyn Hall Patel listened to a summary on Napster’s agreement with her injunction not to trade copyrighted content.

Despite lawsuits, Napster remains the world’s leading person-to-person file sharing community, attracting 6 million visitors on a daily basis. It has also won many awards including Best Music Site, Best Innovative Start-Up, and Best Guerilla Marketing from Wired Magazine Readers Rave Awards.

While Napster has won several awards, and is respected by millions of music enthusiasts, the company is struggling with legal issues. MusicNet, however, prides itself in being the world’s first legal, major label digital distribution platform for streaming and downloadable music. It is a mixture of RealNetworks’ media delivery technology and the music of three major record labels: Warner Music Group, BMG, and EMI Recorded Music. MusicNet’s main objective is to license its platform to companies looking to sell music services under their own brands.

Rob Glaser, Chairman of the Board and interin CEO of MusicNet, says that the announcement “is great for consumers, for artists and for the recording industry.”

It will soon be determined just how great this will be for consumers. The new service will expected to cost subscribers between $10 to $15 a month.

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