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Grokster plays nice by turning radio dial

Partners with P2P radio company Mercora

As it continues to battle Hollywood in Congress and the courts, peer-to-peer company Grokster is launching its first service that doesn’t enable piracy, an online radio network.

Operated in partnership with P2P radio company Mercora, it will allow users to create an Internet radio service out of their personal collections of digital music files.

Application enforces rules to keep users in compliance with copyright law prohibiting on-demand radio without special licensing fees. Users aren’t allowed to stream more than four songs from a certain artist within a three-hour period, for example.

The service also tracks streams and pays royalties to publishers and performance rights holders.

It’s similar to a service Mercora already offers directly to consumers. Since its launch in June, though, Mercora has been largely a niche product with just 200,000 users. Co-branded offering with Grokster will give it access to the millions who download the P2P application each month.

Grokster Radio by Mercora is the first noncontroversial offering from the P2P company, and execs say they hope it will serve as an olive branch to studios and labels with which it’s hoping to forge closer ties.

“The bulk of our users download songs to sample them, and this lets them do so legally,” Grokster prexy Dan Rung said. “It’s a win for consumers, and for labels and artists who get new fees and access to consumers.”

Grokster and Mercora are hoping to market the service to labels that can advertise albums, concerts or legal downloads within the radio application.

In addition, Grokster plans to create its own stations on the service to promote independent artists that it features in the P2P application. While labels and studios have vigorously opposed P2P, many indie artists have embraced the technology as their only way to reach a broad audience.

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