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TVT Records, home to Snoop Doggy Dogg and Nine Inch Nails, has dropped its estimated $1.5 million infringement lawsuit against Napster.

In an about-turn, the Los Angeles, California-based independent label today lauded Napster as the music industry's messiah. It cited Napster's new online business model, which it is developing with Bertelsmann, as the reason behind the decision to drop the legal action.

TVT will allow its copyrighted recordings to be used on the online file sharing service, but financial terms of the settlement were not disclosed. Steve Gottlieb, president of the independent label, will also be an advisor to Napster.

TVT, which filed the suit in New York in June, is the second major US record label to back down over infringement claims against Napster. Bertelsmann, parent of BMG Music - one of five labels suing the dotcom, broke ranks with rivals in October and said it would drop its suit once Napster became a fee-based service. At the time it urged others to follow its lead. The two companies are currently banging out a business model that will pay royalties to artists.

"I am afraid that copyright owner's resistance to finding workable solutions with Internet music providers may result in consumers, artists and
the industry itself ultimately being harmed," said Gottlieb.

"The future Napster offers the opportunity to reach music fans in unprecedented and as yet unimagined ways. Word-of-mouth has always been critical to breaking our artists - now we have harnessed the power of the fastest growing 'word-of-net' vehicle in existence. It is high time that the industry embraces a service that the public has so emphatically said they want."

Napster has 45 million users. ®

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