Bertelsmann (BMG), the German media and publishing giant, broke ranks today with the major record labels by announcing a strategic alliance with Napster, the song-sharing company it had been suing. Together, the two companies will develop the file-swapping service's commercial potential.
Under the terms of the agreement, Bertelsmann will assist Napster in developing a membership-based service that compensates artists, record labels and publishers each time a song is traded. As soon as Napster implements the service, Bertelsmann's music division, BMG, will withdraw its lawsuit and make its catalog available. Bertelsmann's catalog includes the BMG, Arista and RCA imprints, representing artists such as Whitney Houston, Elvis Presley and Carlos Santana.
Source: Reuters / Updated: Oct 31, 2000