The world-wide licensing agreement is Napster’s first direct multi-label deal and represents a significant step in Napster’s recent efforts to change direction by legally distributing record labels’ music on-line, paying royalties to both artists and record labels.
However, the deal does not cover third party publishing rights, which will have to be negotiated directly with the music publishers. This could initially restrict the new subscription service.
The 150 independent labels have said that they will only co-operate with Napster if the new service is proved to be secure and that the royalties are paid in an efficient manner.