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Pastimes : CD Burners Emporium -- Ignore unavailable to you. Want to Upgrade?

To: Original Mad Dog who wrote (149)	2/28/2001 3:13:08 PM
From: Original Mad Dog	Read Replies (1) \| Respond to of 3937

dailynews.yahoo.com Tuesday February 27 9:25 PM ET Vivendi CEO balks at Bertelsmann-Napster deal By Derek Caney NEW YORK (Reuters) - Vivendi Universal's top executive balked at the idea of joining Bertelsmann AG (news - web sites)'s proposed joint venture with Napster (news - web sites) Inc., saying the song-swapping software company would receive too generous a share of the revenues. The German media conglomerate broke ranks with the other major record companies last year, offering to drop a copyright infringement suit against Napster and help the company develop a music subscription service that paid royalties to artists and record labels. Napster, which makes software that allows Internet users to copy music from other people's computers without the permission of artists, labels or publishers, then shopped the deal to the other record companies, hoping to entice them to drop their lawsuits. The company could be forced by a court injunction to shut down unless it reaches a settlement with the labels or an appeals court overturns the injunction. ``We understand that Bertelsmann and Napster have proposed that the distribution platform (Napster) would receive 40 percent of the revenues from the subscription service, while the content provider would receive 60 percent,'' said Jean-Marie Messier, chief executive of Vivendi Universal, which owns Universal Music, the world's largest record company. ``That is too generous for the distribution platform, whose largest cost is bandwidth,'' he said. Bertelsmann and Napster proposed a service earlier this month that would charge between $2.95 and $4.95 a month for a basic subscription service and $5.95 to $9.95 a month for a premium service. ``We do not recognize Napster's ability to set prices or revenue splits,'' Messier said. Andreas Schmidt, CEO of Bertelsmann's e-commerce group said the 60-40 split was based on a precedent set in the Audio Home Recording Act (news - web sites) of 1992. He also said that Napster, which claims a user base of 60 million, could increase industry growth by 30 percent over the next five years. ``I don't think the record industry could manage that by itself,'' he said. The other labels, which include, Sony Music Entertainment , AOL Time Warner Inc.'s Warner Music Group and EMI Group Plc (news - web sites)., have also responded coolly to the Bertelsmann Napster deal. ``No one has yet designed a broad subscription service that complies with the law,'' said one label executive who requested anonymity. ``Napster has talked about it. They've issued press releases. But they haven't shown anyone technology that isn't piracy.'' Messier said he would be open to licensing its catalog to companies with legitimate distribution models that protected intellectual property rights and predicted that such models would emerge in a matter of months. In the meantime, Universal Music is testing its own subscription service. It is also planning a joint service with Sony tentatively called Duet, which is slated to debut this summer. AOL Time Warner has also said it is planning a music subscription service.