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Softbank, Reciprocal Team for Digital Distribution in Japan

Softbank Corp. and digital rights management company Reciprocal Tuesday formed a joint venture to bring digital content distribution and protection services to Japan.

The venture, tentatively called Softbank Digital Rights, Inc., will rely on the digital rights management (DRM) and distribution systems of Reciprocal, and the facilities owned by Softbank. The venture aims to enable Japanese businesses to sell digital content both on- and off-line.

Softbank and Reciprocal expect the venture to propel digital commerce in Japan, pointing to intellectual copyright concerns as the major factor that has held back widespread use of digital distribution.

Reciprocal will also support the partnership through rights enforcement and clearing, information and financial clearing, tracking, reporting services and customer support.

Terms of the deal were not disclosed.

"This partnership leverages the experience Reciprocal has gained around the globe servicing a broad range of customers in music and publishing," said Duncan Shaw, Reciprocal's senior vice president and head of global business development. "It also complements our significant presence in Europe through our relationship with Bertelsmann AG in Germany, where we provide DRM and clearinghouse services to BMG Storage Media for the secure online delivery of content."

Masayoshi Son, Softbank founder and chief executive officer, said the deal plays into his company's plans to become "the hub of the massive digital commerce market."

The two companies plan to enter a formal joint venture in the first quarter of next year, and expect to begin offering DRM and clearinghouse services soon thereafter.

Softbank Digital Rights has already signed its first customer -- eS!Music, a music portal created by Softbank Commerce and Yahoo! Japan, a separate joint venture between Yahoo! (YHOO) and Softbank.



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