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Napster Signs European Labels To New Service

Napster said on Tuesday it had signed a licensing deal with more than 150 independent labels in Europe to provide music for its new subscription service due to be launched this summer.

Independent label artists including Ash, Badly Drawn Boy and Stereophonics will be carried on a new version of Napster that pays royalties, joining artists from major record labels BMG, EMI and AOL Time Warner.

“We’re close to moving into a new phase of Napster and this agreement is an important step along the way,” said Shawn Fanning, the college drop-out who developed the original Napster service which let fans swap songs for free on the Internet.

Napster told a news conference in London that it had spent four months hammering out the deal with the London-based Association of Independent Music, Brussels-based Impala and other trade associations representing thousands of artists throughout Europe.

Earlier this month, Napster clinched a licensing deal with MusicNet – a joint music subscription service between RealNetworks Inc. and the three big labels – BMG, EMI and Warner – to carry their music on Napster’s new service.

The new European deal comes a day after a federal appeals court handed Napster another legal defeat, rejecting its request to challenge a crippling injunction won by the music industry against its song-swapping service.

Barring an appeal to the Supreme Court, Napster now faces a full trial in the record industry’s copyright infringement suit against it. Because Napster users have downloaded billions of copyrighted songs, the trial could result in damages large enough to put it out of business as an independent entity.

The recording industry had sought the injunction to bar Napster from offering its songs on the service while a full copyright infringement case proceeded in court.

A date for that trial has not been set but the injunction has already succeeded in curtailing activity on Napster.

In the meantime, Napster has been developing its new legitimate membership service together with German media group Bertelsmann, parent of music giant BMG.

Napster said tests of the new service were going well.

“A million people have already signed up to be beta tested for the new service,” said Hank Barry, CEO of Napster.

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