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Tuesday, 26 June, 2001, 13:58 GMT 14:58 UK
Napster signs deal with indie labels
UK and European independent record labels have signed a worldwide licensing deal with online song-swapping service Napster.


Independent artists and labels have always been the trend setters in music and the music business

Shaun Fanning
The agreement covers music from more than 150 record companies, including artists such as Stereophonics, Moby, Ash, Paul Oakenfold, Underworld and Tom Jones.

The independent artists join those from major labels BMG, EMI and AOL Time Warner, to be carried on a new version of Napster.

This indie deal is the latest attempt by Napster to secure its future as on online distributor of music, following an earlier court ruling that ordered it to effectively shut down its service.

The agreement gives independent labels a chance to broaden their distribution and compete with major labels and retailers, who have invested heavily in the internet.

'Level-playing field'

The artists will be paid for the use of their music.


This levels the playing field considerably with respect to the majors

Spokeswoman for independent record labels
A spokeswoman for the independent labels said: "This levels the playing field considerably with respect to the majors."

The agreement is with the UK's Association of Independent Music and the Independent Music Companies Association.

The independent labels declined to say how much the deal is worth.

For these labels - which represent about 25% of the UK market - getting their music to consumers is a burning issue.

"Access to market is the key word... It is very difficult in the physical world of increased concentration... We were worried that in the new economy concentration was happening even faster than in the old economy," Impala's Patrick Zelnik said.

Indie leadership

Napster founder Shaun Fanning told a London press conference: "Independent artists and labels have always been the trend setters in music and the music business.

"I am grateful that they are now showing that leadership when it comes to using technology to make music more accessible."

He described himself as a fan of Moby and Paul Oakenfold.

"I am thrilled that the Napster community will be able to access and share such music."

He added that charging users for music had "been difficult to get his head around... I didn't expect it to become a business... the notion of music being free is a nice idea." He added that payment enabled "artists to continue writing great music".

The move has been welcomed by artists. Paul Oakenfold said: "It is good that it has at long last become legitimate and the artists and their labels will get paid."

Napster challenge

However, despite this and other deals, Napster's future still remains unclear.

User numbers have fallen in recent months and there is no clear evidence that people want to pay for music online.

However, Napster chief executive Hank Barry said: "They have told us consistently they want to pay for service because they want to make sure artists get paid."

More than a million people have signed up to participate in trials of the new Napster service but it is unclear how many subscribers it will need to break even.

When asked about falling user numbers, Mr Barry pointed to falling record sales in the US generally. He added: "We have been complying with the court injunction... As we move into the new service, hopefully we will be able to jettison that baggage, hopefully we will be able to move forward."

Even then, the path forward is not a smooth one.

Napster still has to secure publishing rights for the music. "I don't have any way of knowing what way that will go," Mr Barry admitted.

Court failure

Earlier, Napster failed in a last ditch effort to win a reversal of the copyright clampdown which has prompted a sharp decline in its user numbers.

Napster founder
Fanning: Fighting on
A federal appeals court rejected Napster's plea for a rehearing in the landmark lawsuit which ended with the service being barred in March from facilitating trade in copyrighted songs.

Observers said they were not surprised by the court decision, which, while published on Monday, was made on Friday.

If the recording firms win the case at trial, they could come out of it being owed more in damages than Napster is worth, said Ric Dube, an analyst with research firm WebNoize.

His comments came despite a deal three weeks ago in which Napster signed a deal with BMG, EMI and AOL Time Warner - three of the record companies behind the legal action.

"The major companies can come out of this owning Napster," he said.

Napster, however, has not ruled out a further appeal, to the US Supreme Court over the March injunction.

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 ON THIS STORY
The BBC's John Moylan
"Earlier this year, the music industry won an injunction forcing Napster to remove any copyright material"
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