Music firms rival Napster

Napster founder Shawn Fanning denies infringing copyright

Vivendi Universal and Sony are to form a new company, Duet, to rival Napster's online music sharing service.

The news is a fresh blow to Napster and its partner, the German music giant Bertelsmann. Both firms hope to reach a compromise with other record firms after Napster lost an important battle in its legal case about copyright violations.

We want to put the maximum amount of music on the maximum number of platforms

Jean-Marie Messier
Vivendi Universal

The world's major record companies have dismissed Napster's suggestion for a $1bn settlement as worthless and called on the site to throw in the towel.

Duet is an exclusive licensing agreement covering the two companies' music catalogues, and could be the final nail in the coffin of Napster's hopes to stay alive.

"In Duet, we have something to start with and no one can imagine launching online music without the world's number one and number two companies," said Vivendi's head Jean-Marie Messier in an interview with French newspaper La Tribune.

Survival hopes

"We hope to licence 50% of the world's music," said Mr Messier, pointing to the powerful combination of the world's two biggest record companies.

Will Barry throw in the towel?

The intention of Duet is to provide a secure site for downloading music whilst ensuring the protection of all artists and copyrights.

And Duet plans to sign agreements with online distributors in order to expand its base.

When asked about the likelihood of negotiating with Napster, Mr Messier said "we will be ready to negotiate when Napster is in a position to respect the California's judge's ruling... that is not the case today".

I don't see why pirates should have the advantage

Jean-Marie Messier
Vivendi Universal

Industry observers have commented that an alliance with Napster is the best way forward.

But Mr Messier says advanced discussion will other partners are underway, adding "I don't see why pirates should have the advantage".

Vivendi's head also said that they are aggressively developing an online distribution portal for the film industry.

Current Napster software allows users to search for MP3 music files stored on the hard drives of potentially millions of users. The files can be swapped for no charge.

EMI, BMG, Sony, Warner and Universal argue that Napster's users are costing them billions of dollars in lost royalties. Napster says the users of its software, some 50 million of them, are not infringing copyright.

After losing an important legal battle in the case over copyright infringement, Napster proposed to pay the five major record companies $150m per year for five years, using the revenues generated by a new subscription service.