Vivendi's Messier warms to Napster venture

Merissa Marr

LONDON: Media and entertainment giant Vivendi Universal warmed on Monday to
the idea of joining Napster's new online music venture with Bertelsmann, saying
it could consider jumping on board over the next few months.

Toning down earlier skepticism towards Napster's new music venture, Vivendi
Universal's chief executive Jean-Marie Messier said he had been encouraged by
Napster's move to block free trade of various copyrighted tracks on its music
Web site.

Messier said the group's Duet joint venture with Sony Music might be willing
to license music to a subscription service, having previously balked at the idea
of joining a legitimate version of Napster's popular song swap site.

"If a legitimate service that demonstrates secure technology is
developed, we may license Duet content to Napster but at the same time as others
such as MSN, Yahoo, Freeserve, Wanadoo and so on," Messier told the FT New
Media & Broadcasting conference.

"We have to make our content available on all platforms," he said.

Napster, whose original site allows users to swap songs for free over the
Internet, started blocking users from a number of music files over the weekend
in a last-ditch effort to keep the service from being shut down completely.

Together with Germany's Bertelsmann, which owns music group BMG, Napster
plans to launch a legitimate version of its wildly popular song swap site this
summer.

However, major music groups - including Universal Music, Sony Music, Warner
Music and EMI - have reacted coolly to the project after suing Napster for
copyright piracy which they say has cost them billions of dollars in lost sales.

Deals with US distributors

In the meantime, Universal Music announced it would debut its own digital
delivery joint venture with Sony Music, tentatively named Duet, while AOL Time
Warner said it was planning its own subscription service.

"There are two criteria that must be met before we consider joining
Napster's new service: firstly, that it recognizes copyright and secondly, it
demonstrates that its technology is secure," Messier said.

Messier said Vivendi was pursuing commercial agreements with distributors
across the board in the United States, but the French boss would not name any
potential partners.

Vivendi Universal has impressive content assets in the United States
including leading music group Universal Music and US film company Universal
Studios, but it lacks its own pay-TV platforms and telecom networks to
distribute that content.

Napster's move to block files on its site may have impressed Messier, but
industry sources said the blocked files amounted to barring only several hundred
copyrighted songs on the online directory in which billions of files are traded
monthly.

Only last week, Messier was shrinking from the idea of joining Napster's
subscription service, complaining that Napster would receive a too generous 40
percent share of revenues from its new site under proposals presented to music
companies.

However, Napster, which claims a user base of 60 million, says it could
increase industry growth by 30 per cent over the next five years.

Bertelsmann and Napster's proposed service will charge between $2.95 and
$4.95 a month for a basic subscription service and $5.95 and $9.95 a month for a
premium service.

"We are not going to announce Duet's pricing structure until we launch
the service this summer," Messier said.

(C) Reuters Limited 2001.