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Napster, Bertelsmann scout out more players

Industry Standard

(IDG) -- Music-swap service Napster and major recording company parent Bertelsmann continue to solicit the participation of other music groups for their vision of a secure file-sharing community, executives of both companies said Monday at the Webnoize conference in Los Angeles.

Both companies have been quiet on details of the proposed service and about negotiations with other recording companies, whose participation is needed if the new Napster is to have enough content to attract paying users. None of the other recording companies has agreed to join the Napster-Bertelsmann alliance, but both firms say talks are continuing and that they are optimistic.

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Napster and Bertelsmann also have been mum on how the proposed service would track downloads of songs across Napster's peer-to-peer system, though the startup's lawyers have told judges that such oversight is not possible within the system's current architecture.

However, Napster interim CEO Hank Barry said at Webnoize on Monday that the company is working to solve the issue. "There are lots of ways to do it," Barry said. "A couple of people have come forward, and we've got some ideas ourselves."

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Some of those ideas deal with Napster's architecture, which unlike other leading file-sharing systems, such as Gnutella and Freenet, uses a server. Because Napster employs both client and server software applications that reside on a user's hard drive as well as on Napster's servers the company would have to be able to distribute any tracking function to both sides of the program.

Andreas Schmidt, head of Bertelsmann's e-commerce group, which forged the deal with Napster, dismissed concerns about how a new system would protect files being traded so that they would stay within the community of paying users. "Sometimes when it comes to the security concern, the industry approaches this as the National Security Agency," he said. "As we have to compensate the rights holders and artists, there needs to be some level of security."

Napster and Bertelsmann surprised the music and Internet industries two weeks ago when they announced a broad alliance to develop a secure file-sharing environment that would compensate artists and copyright holders. The new service, if it can be developed, has the potential to radically alter the way music is promoted, sold and consumed. The Big Five recording companies, including Bertelsmann's BMG unit, are suing Napster for allegedly contributing to copyright infringement.

Barry, who is a partner at venture capital firm Hummer Winblad, also said Monday that he is looking to turn over Napster's reins as CEO. "We're recruiting a new CEO," Barry said. "So we're accepting resumes."



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October 19, 2000
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RELATED IDG.net STORIES:
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(The Industry Standard)
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RELATED SITES:
Bertelsmann AG
Napster Inc.
Hummer Winblad Venture Partners

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