Yesterday we reported that Bertelsmann (BMG Music) made a deal with Napster. They would drop the case against them and together they would create a new Napster like service.
Bertelsmann also invited the four other music companies to join them, and quit the case against napster because there is nothing to win. Now, a day later, the other four companies still didn't react....
An article @ ZDNet
Music labels in shock over Napster |
Life-threatening foe one minute, best buds the next? Music companies must decide whether to accept Bertlesmann's invite to support Napster.
LOS ANGELES -- Entertainment conglomerate Bertelsmann AG's unexpected deal with song-swap company Napster Inc. has put rivals of its BMG record company on the spot -- should they jump on the bandwagon or tough it out?
All of Bertelsmann's big music competitors -- such as Seagram Co Ltd's Universal Music, Sony Corp.'s Sony Music, Time Warner Inc.'s (NYSE: TWX) Warner Music Group, and EMI Group plc.'s EMI Music -- issued statements on Tuesday supporting the deal by Bertelsmann to try to legitimize Napster .
But a day later, many music company executives privately talked about how surprised they were by the timing of the deal and questioned Bertelsmann's motives. BMG, along with the other music companies, is suing Napster for copyright infringement.
As part of the deal, Bertelsmann invited other labels to participate in the pact to transform the renegade song-swap service into a membership-based service that pays royalties.
'If their intention was to involve all of us, then you'd think we would have gotten a phone call from Bertelsmann the day before. But there was nothing,' said one executive at major recording company.
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It is unclear whether the other labels, who consider Napster a haven for online piracy, will join in the alliance, particularly as questions abound regarding the success of the deal. Napster and Bertelsmann have promised they would develop services that both please Napster users -- accustomed to getting vast amounts of music for free -- as well as compensate rights holders, but have given few details.
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Many industry experts expect the labels will wait for an appeals court decision on whether or not to shut down Napster pending a final decision in their landmark copyright case against the wildly popular service.
Also an article @ The Register:
...MP3.com was able to settle with all the other major labels - Sony, EMI, Warner and BMG - and that suggests that these companies could well side with BMG on the Napster issue. After all, they want to reach as wide an audience as possible for their product, and an industry-friendly Napster would provide a major channel to potential customers. |
Universal is clearly sceptical of that plan. One unnamed executive told the Financial Times that BMG's deal is no more than a "PR announcement without any substance".
I don't think the deal with Bertelsmann will survive if the other music companies don't cooperate. In the meantime the case against napster will continue....
More news when available
