Napster receives cautious overtures from Vivendi

Vivendi has pledged its support for Napster in what appears to be a dramatic U-turn by the media giant - although the company is playing down quite how far the support goes.

Speaking at the FT New Media and Broadcasting conference, Vivendi CEO Jean-Marie Messier said he would consider a licensing deal between Duet - the new file-sharing initiative from Sony and Vivendi subsidiary Universal Music - and Napster, as soon as the controversial internet music firm legitimises its service. But only last week, Messiers went on the record to say he was vehement that Vivendi would not back the Napster/Bertelsmann alliance, because he objected to the 40 per cent revenue share Napster stands to make from the deal. He said that Vivendi would not recognise Napster's right to regulate service fees and revenue splits. However, a Vivendi spokesman today reluctantly confirmed that the company is now willing to negotiate with a legitimised Napster, although talks have not yet begun. "We're fighting everyday against joining Napster," he said, "but we do need to deliver the maximum music on the maximum platform. All I will say is that we're willing to negotiate but that is not the same as joining." He denied that Messier's change of heart was a reversal of opinion, saying Vivendi had never issued a definitive statement for or against Napster. Duet is due for commercial release this summer, and rival AOL Time Warner is rumoured to be developing a similar service. Industry watchers agree that despite current industry opposition to Napster, the big labels will need to exploit the pirate channel, along with their own offerings, if they are to maintain sales. Peter Kumik, European MD of secure content software vendors Sealed Media, claims the big record companies only have themselves to blame for the Catch 22 situation they now find themselves in. He says they helped the success of digital music piracy when they created a CD-buying market without adding adequate technology safeguards. But he stressed that this move by Vivendi could be a make or break event for both Napster and the big labels, with anti-Napster rivals set to lighten their stance if Vivendi gives the go-ahead.