Visiosonic Ltd. Wednesday announced it has developed a solution to digital music piracy it calls "Interactive MP3."

"We believe that artists and copyright holders should be paid for their product, yet the public has come to expect music on the Internet to be free, like it is on radio," said Visiosonic's chief executive officer, Joe Vangieri. "Our new 'Interactive MP3' technology permits both to occur, while actually embracing the concept of free song sharing over the Net."

Vangieri says the "Interactive MP3" system is Napster-friendly, and the more the song is distributed, the more money artists and labels will make.

Under Visiosonic's "Interactive MP3" methodology, digital music would be formatted and automatically registered under a digital rights management system. Such music could then be freely downloaded on the Internet and played on PCs. Royalties would be paid to copyright holders from funds amassed from businesses that pay to become "Interactive MP3" sponsors.

Record producer Nile Rodgers will head a coalition of artists and producers that will urge senior music industry executives to examine the potential and immediate applications for the new "Interactive MP3" technology.

"I am concerned that the creative community be properly rewarded, and I'm excited to be part of a coalition that can provide a mechanism for doing so in a world where digital downloads of copyrighted materials -- with no compensation to the creators -- is so wide-spread," said Rodgers.

"Under our plan, advertisers will pay the cost of broadcasting, just as they now do in Radio and Television," said Vangieri. "But this is absolutely not about tacking commercials onto existing MP3 songs. This is something new."

"This new technology can easily solve Napster's problems with the recording industry," says Vangieri. Vangieri said the wrong thing for the recording industry to do is to kill off Napster.

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"Everyone involved needs to get out of their entrenched positions. What we've done is come up with a solution that can provide revenues for artists while allowing kids continued access to free music, just like radio. We don't have to spend time worrying that kids will 'crack' our secure format, since it won't be worth their time to do so," said Vangieri. "Now kids can feel good about the music they download for free instead of feeling guilty about it."