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AOL Time Warner poo-poos Napster-BMG deal

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Bertelsmann may reckon it can launch a fee-based, legitimate version of Napster's music sharing service next summer, but AOL Time Warner, for one, disagrees.

The newly merged media giant, owner of Warner Music Group, has joined fellow 'big five' music company Universal to express in public its scepticism over Bertelsmann's team-up with Napster.

"We have had discussions with Bertelsmann, said AOL Time Warner co-COO Richard Parsons, "but we haven't seen a business model that puts the reality around that dream."

Still, that's not quite as negative as Universal's attitude to the Napster-Bertelsmann partnership, which has been scathing since the deal was announced last October. This month, Universal's new boss, Jean-Marie Messier, said that if the US Appeal Court finds Napster guilty of copyright violation, his company will not settle out of court.

In a case parallel to the music industry's legal action against Napster, Universal was the only major music company not to settle out of court with MP3.com and walked away with significantly more cash than its fellow 'big fivers' did. Presumably it hopes to repeat that with Napster.

The others may too, which is why they're being cautiously negative about Bertelsmann's chances of success. Unlike MP3.com, Napster hasn't made enough money out of its service and the software that powers it to pay the damages the music industry is seeking.

And, in the meantime, they continue to discuss the matter with Bertelsmann, according to the German media conglomerate. "We're working with and meeting with all the major record labels and the discussions are ongoing," said a company spokeswoman. ®

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