We're legal, says Napster rival

Battle: Napster's future holds key to music on the net

A rival to the controversial Napster internet service has been launched, claiming to be a 'legal alternative'.

INoize, based in Canada, allows internet users to share music files but not to copy files, unlike Napster.

The service's backers say INoize does not infringe copyright, the issue at the crux of a legal wrangle between Napster and the recording industry.

Major record labels are attempting to shut down Napster because they believe it promotes the illegal copying of music.

"Music is easily accessible and ready to play whenever you want without the copyright infringement issues that plagued services like Napster and MP3.com (Inc.),'' said Craig Hamilton, vice-president of INoize.

'Interactive service'

The company will pay royalties to artists whose music is used on the site, he added.

The music files downloaded will also be encrypted to prevent the illegal copying of singles and albums.

In the US, record labels do not receive royalties when songs are broadcast on the radio, but new legislation means royalties for streamed music on the net have to be paid.

"This service sounds more like an interactive service than an internet radio station,'' said media analyst Eric Scheirer of INoize.

He added: "The so-called legal alternatives to Napster are popping up all over the place."

Napster has amassed about 30 million users, and the legal battle is being seen as the first major test of how copyright laws can be applied to the internet.

Giant record companies, such as Universal Music, Bertelsmann AG BMG, and Sony Music are fighting the lawsuit to shut down Napster, which they allege is a haven for music piracy.

The outcome is expected to shape the future of how books, films and music are distributed via the net.