TVT DROPS SUIT AGAINST NAPSTER

TVT President Steven Gottlieb said Napster's evolution towards becoming a legitimate online service through its alliance with Bertelsmann sparked his decision to end the lawsuit, which was originally filed in June (hitsdailydouble.com, 6/8). In October, Bertelsmann signed a controversial deal with the legally challenged online site, saying it would drop its suit once Napster was transformed into a fee-charging service that pays royalties to artists and record companies.

Since Bertelsmann's BMG is still part of the five major labels' continuing litigation against Napster, TVT becomes the first record label to fully settle with the company, both parties said Thursday.

Financial terms of the settlement were not disclosed, but TVT said it would allow the master recordings and musical compositions it owns or controls to be used for file sharing on the Napster service.

As part of the deal, Gottlieb has also agreed to act as an advisor to Napster.