Napster, the controversial music file-sharing site, continues its march to implement a business model that can generate revenue. Today, edel Music AG, the world's second-largest independent music label, says it has agreed to cooperate with Napster around Napster's new paid membership-based business model. Napster, whose membership grew rapidly into the millions as a free service, now plans to generate revenue by charging a monthly membership fee.

Edel, based in Hamburg, Germany, says it will allow the master recordings and musical compositions it owns or controls to be used for file sharing under the new service Napster is evolving. The companies will work together to promote further acceptance of the new Napster business model among interested parties. Also, edel will advise Redwood City-based Napster as part of the company's ongoing effort to address the concerns of artists, songwriters, and record and publishing companies. And beginning next month, selected edel artists will be promoted through Napster's Featured Music Program, a feature that helps the Napster user community discover new music and artists.

"This is a very logical step for a company like ours," says Michael Haentjes, edel's CEO. "We welcome Napster's commitment to protect the interests of artists, songwriters and other rights holders through their new business model, and we will support any activity that provides for fair compensation for everyone involved."

Napster says its membership-based service will provide its community members with high-quality file sharing while at the same time providing payments to rights holders, including recording artists, songwriters, recording companies and music publishers. On Oct. 31, 2000, Napster and Bertelsmann's eCommerce Group announced a strategic alliance to further develop the Napster person-to-person file-sharing service.

"We are delighted that a progressive and successful label like edel has stepped forward and recognized that the interests of music lovers and music makers are both enhanced by the service that Napster is developing," says Napster CEO Hank Barry.