Napster in Alliance With Edel Music
L O S A N G E L E S, Jan. 2, 2001 -- Starting the year on a high note, Napster Inc., the developer of the wildly popular and controversial computerized song-swap service, said today itformed an alliance with Edel Music AG, one of the world’s largestindependent music labels.
A Napster spokeswoman said the alliance marks its second dealwith a member of the world’s recording industry after BertelsmannAG in October broke ranks with other global music giants suingNapster for copyright infringement.
Back then, Bertelsmann said it would drop its lawsuit onceNapster offered a secure, fee-charging service, and invited otherlabels to join the alliance.
Hamburg, Germany-based Edel, a full service independent labelwhich produces compilations and distributes many acts, includingartists like Roxette, Jennifer Paige and Phunky Data in the United States,said today it will allow master recordings and musicalcompositions it owns or controls to be used for file sharingunder the new service Napster is developing.
“We are very happy to be working with Edel as we evolvetoward our new model,” Hank Barry, chief executive officer ofNapster, said in a statement.
“We are delighted that a progressive and successful labellike Edel has stepped forward and recognized that the interestsof music lovers and music makers are both enhanced by the servicethat Napster is developing,” he said.
Edel, which recently reported poor results and cut its 2000earnings forecast, said it will work with Napster to promotefurther acceptance of the new Napster business model amonginterested parties. Edel will advise Napster on its efforts toaddress the concerns of artists, songwriters, and record andpublishing companies.
“This is a very logical step for a company like ours,” saidMichael Haentjes, Edel’s chief executive officer.
“We welcome Napster’s commitment to protect the interests ofartists, songwriters and other rightsholders through their newbusiness model, and we will support any activity that providesfor fair compensation for everyone involved. This agreement makesclear that Edel is on the forefront of new technologies andinnovative marketing,” he said.
Bertelsmann Welcomes Edel Deal
Bertelsmann welcomed the latest development.
“For Napster, this is a major step forward. Edel Music isEurope’s most successful independent label of the last decade. Weare delighted that Edel Music has sent such a forward-lookingsignal with its willingness to cooperate,” said Andreas Schmidt,president and chief executive officer of Bertelsmann eCommerceGroup.
“We would also like to explicitly invite the other musiclabels to support Napster,” he said. “The file-sharing serviceoffers an ideal platform for successfully marketing music andenhancing the public’s awareness of artists.”
Bertelsmann is expected to announce a new managementstructure very soon after the unexpected death of Rudi Gassner,58, on Dec. 23. Gassner had recently been appointed as head ofBertelsmann Music Group following a shakeup in the executiveranks after the Napster deal was announced.
Bertelsmann and Napster have yet to discuss details on theirplanned service or business plan and many industry watchers haveexpressed skepticism that they even have one, given the legal andoperational challenges.
In an interview last week, Napster’s Barry said, “We have amodel now that is pretty detailed but we haven’t shared it withthe public.”