Bertelsmann subsid duets with Napster

BeMusic to use digital music technology, sans file-sharing

Bertelsmann e-commerce division BeCG has inked a technology licensing and distribution pact with Napster for digital music services from the recently formed BeCG subscription services company BeMusic, forming an even closer alliance between the German media giant and the infamous file-swapper.

Under the terms of the deal, BeMusic will use community-building, chat, search and security technology from Napster’s second-generation service, which the company has been developing as an alternative to its legally embattled free offering.

BeMusic will not, however, be using the most well-known Napster technology — its peer-to-peer file-sharing service. Company will opt instead for a business model built on direct downloads through its existing properties, which include online retailer CDNow, record club BMG Direct and the recently acquired digital locker service Myplay.

Pact is a rare bit of good news for Napster, which has been fighting a losing battle in the courts against all five major record companies over alleged copyright infringement by its free service. Bertelsmann, which owns label group BMG, broke ranks with its peers last October, lending Napster $60 million to develop a revamped service that compensates rights-holders. The new offering, originally set to launch July 1, has yet to be unveiled.

BeMusic’s services are separate from those of MusicNet, the digital music subscription service backed by Bertelsmann, AOL Time Warner, EMI and RealNetworks. Set to launch by year’s end, MusicNet has entered into its own licensing pact with Napster whereby the file-swapper will gain access to the MusicNet platform and, once the new Napster service is proven to be secure, MusicNet content as well.

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