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Napster In Talks To Use InterTrust's Code
By Todd Spangler, Interactive Week
February 9, 2001 3:40 PM ET
Napster, the music-sharing service reviled by much of the music industry, is in discussions with InterTrust Technologies concerning the use of InterTrust's content-protection technology in the forthcoming version of its service.
David Ludvigson, president and chief operating officer of InterTrust, said his company is in talks with Napster and Bertelsmann - which is working with Napster to develop a "legitimate," subscription-based version of the service - about using the InterTrust technology.
InterTrust, based in Santa Clara, Calif., is one of the top suppliers of digital rights management - or DRM - tools to content producers and others. InterTrust's DRM technology allows content owners to place restrictions on how music, movies or other digital assets are distributed or played.
InterTrust already has a partnership in place with Bertelsmann, the German media company. Last year, Bertelsmann formed its own digital rights management company, Digital World Services, which uses InterTrust's digital rights management technology to provide "clearinghouse" functions for the distribution of digital content.
"We're not formally doing anything [with Napster], but we're talking to DWS, Bertelsmann and Napster about using our technology," Ludvigson said in an interview.
A Napster representative did not return phone calls requesting comment on which other DRM vendors Napster may be considering.
Last October, Bertelsmann made the stunning announcement that it would loan Napster $50 million to develop a copyright-friendly version of the service.
The media company also said it would drop its lawsuit against Napster if it successfully launched such a service that would compensate the music companies.
Since then, Napster has not disclosed how or when it plans to implement the secure version of the service, although it has floated a potential monthly subscription fee of $4.95. Napster executives have said that the company expects to maintain a free version - dubbed "Napster Classic" by some analysts - regardless of the nature of the fee-based counterpart.
Besides its arrangement with Bertelsmann, InterTrust also has licensing agreements with other companies, including America Online, Universal Music Group, Adobe Systems, and Nokia - which last week also invested $20 million in InterTrust.