Grokster in early talks with Sony BMG

[RuffRyders]

[b]Grokster in early talks with Sony BMG[/b]
[i]Sony BMG, the world's No. 2 record label, is in early talks with file-sharing network Grokster in what could lead to a legalized Internet music service, its chairman said on Tuesday.[/i]

Rolf Schmidt-Holtz, who oversaw the merger of the music units of Germany's Bertelsmann and Sony of Japan earlier this year, said swapping music over the Web was too popular to ignore and that he aimed to legalize it. "I'm not negotiating myself, as Sony BMG chairman, but I know that some staff members are at the very beginning of talks with Grokster," said Rolf Schmidt-Holtz in Berlin.

Schmidt-Holtz was participating in a panel discussion at the presentation of a study on broadband Internet, hosted by Germany's dominant Internet service, T-Online International.

"We are noticing that there is huge demand for services like that, and our intention is to transfer this demand into legal channels. Only then it would make sense for us," he said.

He added that he knew of only one meeting between Sony BMG and Grokster, and said he did not know the status of talks or who started them.
Digital agenda

Grokster is one of many Internet music networks that the music industry has blamed for encouraging and enabling rampant piracy that has seen music sales plummeting over the past four years--during which record labels failed to launch Internet offers that could compete with illegal sites.

"The music industry didn't define for a long time what its role is," Schmidt-Holtz said.

Sony BMG's move brings back memories of an alliance Bertelsmann struck with file-swapping network Napster in 2000, raising the wrath of the music industry--including its own BMG arm--against it.

[url=\"http://news.com.com/Grokster+in+early+talks+with+Sony+BMG/2100-1027_3-5454702.html?tag=nefd.hed\"][Source][/url]