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Under the terms of the agreement, once Napster successfully implements its new membership-based service, Bertelsmann’s music division, BMG, will withdraw its lawsuit against Napster and make its music catalog available.

BERTELSMANN PACTS
WITH NAPSTER

Germans To Mobilize 30 Million Subscribers; Does That Make Anyone Else Nervous?
It's not like we didn't warn you.

Just as we suspected (rumor mill, 10/25), Bertelsmann AG and Napster are hooking up. The two companies today (10/31) announced the formation of a strategic alliance to further develop Napster's person-to-person—or P2P, if you're really cool—file-sharing service.

Working together, Napster and Bertelsmann's eCommerce Group, BeCG, have developed a new business model for a secure membership-based service. Of course, "new business model" implies that Napster had an old one, but that's beside the point. This "new" model will provide Napster community members with file-sharing that, according to the press release, "preserves the Napster experience while…providing payments to rights holders."

Naturally, in this context, "preserving the Napster experience" means "just like Napster, only not free."

Under the terms of the agreement, once Napster successfully implements its new membership-based service, Bertelsmann's music division, BMG, will withdraw its lawsuit against Napster and make its music catalog available. To aid in the development of the new service, BeCG will provide a loan to Napster and will hold a warrant to acquire a portion of Napster's equity. The amount of the loan was not disclosed at press time.

Napster and Bertelsmann will seek support from others in the music industry to establish Napster as a widely accepted membership-based service and will invite them to participate actively in the process.

"This strategic alliance with Bertelsmann is the right next step for Napster," said Napster CEO Hank Barry, visibly relieved that someone else with money was on Napster's side. "The Napster community—which is the fastest-growing in the history of the Internet—will benefit enormously from Bertelsmann's historic commitment to world domination…er…I mean, innovation."

Napster founder Shawn Fanning added, "I am excited that Bertelsmann appreciates and values the uniqueness of the community Napster users have built. I look forward to Napster becoming a part of even more people's lives, helping the way people discover and explore music."

"Our strategic alliance mit Napster is key to providing consumers in ze future mit access to ze largest global music catalog of high qvality music files—mit added convenience und features," said Andreas Schmidt, President and CEO of BeCG, shortly before giving the order to annex the e-Sudetenland.

The spirit of Neville Chamberlain could not be reached for comment.

 

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