By MATT MOORE, AP Business Writer
Bertelsmann AG said Friday it will launch a new service that uses the technology made popular by file-swapping businesses for legal downloads of music and movies.
The service, dubbed GNAB, or "bang" in reverse, is set to be used in Germany by the end of this year, with an eventual rollout to other countries through 2006 and beyond, the company said.
Unlike Bertelsmann's previous foray with the original Napster -- which led to a bevy of lawsuits over violations of copyright law -- GNAB uses a decentralized peer-to-peer network to offer downloads whose original content is hosted on centralized servers.
"Most of it is ready," said a Gernot Wolf, a spokesman for Arvato AG, the media services unit of Guentersloh-based Bertelsmann.
Unlike other file-sharing programs, Arvato said, GNAB will be licensed to partners who can use it to sell their own downloads, meaning consumers will only get to use it if they go through a particular partner or company.
"We are a service provider and we present the idea and technique of GNAB to others," Wolf said.
The decentralized nature of GNAB's technology makes it feasible for providers to distribute large files like feature films or games without overburdening the centralized servers.
"In addition, we can offer our customers and all users of the platform a maximum of quality and security thanks to our secure file-sharing technology," said Hartmut Ostrowski, chairman and chief executive of Arvato.
Arvato has agreements lined up with several labels, particularly Sony BMG, of which Bertelsmann has a 50 percent stake, giving it access to about 1 million songs.
The service comes amid heightened competition by other companies, notably Apple Computer's ubiquitous iTunes, which is popular in the United States and has local versions operating throughout Europe.
Just this month, iTunes began offering downloads of music videos, short films from Pixar and television shows like "Desperate Housewives" and "Lost." The episodes are available for download the morning after they are on ABC television in the United States.
File-sharing networks that use peer-to-peer sharing have drawn fire from major record companies because they claim that users are sharing the music illegally, depriving them of income.
In a bid to stem such losses, several have cut their own deals with companies to offer the products for sale via download themselves.
According to Arvato's Web site, GNAB adds features that ensure copyrighted material that is downloaded is flagged so that payment for the file, such as a song, can be made.
Copyright 2005 The Associated Press.
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