Starting the year on a high note, Napster, the developer of the popular and controversial song-swap website, said it formed an alliance with Edel Music, one of the world's largest independent music labels.

A spokeswoman for Napster said the alliance marked its second deal with a member of the world's recording industry after Bertelsmann in October broke ranks with other global music companies suing Napster for copyright infringement.

Bertelsmann said it would drop its lawsuit once Napster offered a secure, fee-charging service, and invited other labels to join the alliance.

German-based Edel, a full service independent label which produces compilations and distributes many acts, including Carl Cox, Jennifer Paige and Phunky Data in the UK, said it would allow master recordings and musical compositions it owns or controls to be used for file sharing under the new service Napster is developing.

"We are very happy to be working with Edel as we evolve toward our new model," Hank Barry, chief executive officer of Napster, said. "We are delighted that a progressive and successful label like Edel has stepped forward and recognised that the interests of music lovers and music makers are both enhanced by the service that Napster is developing."

Edel, which recently reported poor results and cut its 2000 earnings forecast, said it would work with Napster to promote further acceptance of the new Napster business model among interested parties. Edel will advise Napster on its efforts to address the concerns of artists, songwriters, and record and publishing companies.

"This is a very logical step for a company like ours," said Michael Haentjes, Edel's chief executive officer.

"We welcome Napster's commitment to protect the interests of artists, songwriters and other rights holders through their new business model, and we will support any activity that provides for fair compensation for everyone involved. This agreement makes clear that Edel is on the forefront of new technologies and innovative marketing."

Bertelsmann yesterday welcomed the latest development. "For Napster, this is a major step forward. Edel Music is Europe's most successful independent label of the last decade. We are delighted that Edel Music has sent such a forward-looking signal with its willingness to cooperate," said Andreas Schmidt, president and chief executive officer of Bertelsmann e-Commerce Group. "We would also like to explicitly invite the other music labels to support Napster."
Reuters