Napster links with Bertelsmann for subscription service
- Added:
- Oct 31, 2000
The partners hope that the deal will legitimise Napster's controversial file-sharing service in the eyes of the music industry establishment and encourage its use as a new distribution platform and promotional vehicle.
Thomas Middelhoff, Bertelsmann's chairman and CEO, said in a statement: “Napster has pointed the way for a new direction for music distribution, and we believe it will form the basis of important and exciting new business models for the future of the music industry. We invite other record and publishing companies, artists and other industry members to participate in the development of a secure and membership-based service.”
Once Napster implements its new membership-based service Bertelsmann's record label BMG will withdraw its lawsuit against Napster and make its music catalogue available.
Bertelsmann's newly-formed e-commerce group, BeCG, will provide a loan to Napster to finance the development of the new service, in return for an option on Napster equity.