Napster mulls copyright-friendly system

Digital music firm Liquid Audio could hold the key to the future of embattled music sharing site Napster.

Buried among the details of Napster's legal battle last week was a notice on its website, revealing the formation of a research and development pact between the firm and Liquid Audio.

Although details of the pact are thin on the ground, vnunet.com has learnt that part of this deal will result in Liquid Audio licensing its Genuine Music Technology to Napster. The Genuine Music mark is applied by the creator of a digital music file when it is distributed online and appears on a user's screen when the file is played to illustrate it has copyright approval.

As well as technology, Liquid Audio has a distribution network that takes in the websites of 19 online stores, 42 music ventures, 66 record labels, 64 retailers, 190 radio stations, 10 broadband channels owned by MediaOne, and three production houses.

Some 58 artists have also signed up to have their catalogues distributed by Liquid Audio, including The Grateful Dead, Simple Minds and Iron Maiden. According to a recent survey by Webnoize, 58.5 per cent of Napster users would be prepared to pay a small sum to download artist-approved music from the web.

Liquid Audio can offer Napster much of what it will need if its legal appeal fails and it is prevented from continuing to operate in its present state. It would become undisputedly legitimate, and have copyright identification, proven distribution, payment technology and an initial roster of credible artists.

"Liquid Audio's technologies can be used to benefit artists and million of music fans using Napster," said Gerry Kearby, chief executive at Liquid Audio.

According to published reports, Liquid Audio has also held so-called business development talks with online music firm EMusic and the Universal record label, although the latter's announcement earlier this week of its Bluematter venture would seem to preclude any deal with Napster.

Analysts at Jupiter Communications have called Napster a "mentor" for the record industry in this field and say the focus should be on who is going to build a business model based on Napster rather than the current lawsuit between Napster and the Recording Industry Association of America.

Analysts at Gartner also said incorporating technology that would enforce copyright laws by operating a 'pay to download' system could provide a workable business model. However, they also said this approach could anger consumers if it limits their freedom to reuse and share.

Lawsuits permitting, Napster's deal with Liquid Audio could be the first stage in building the business model that the music industry is now looking for.