Sony BMG Inks Deal With P2P Firm Mashboxx

Music giant Sony BMG has finalized its deal with the legal file-sharing network Mashboxx, two days after a U.S. court dealt a blow to Mashboxx's unauthorized rivals such as Grokster.

Mashboxx, headed by former Grokster president Wayne Rosso, is a peer-to-peer file-sharing network that requires users to pay for copyrighted songs.

The companies said on Wednesday that Sony BMG songs will cost $0.99 each, in line with the price charged by Apple's market-leading iTunes online music store. Unlike iTunes, users will be able to preview entire tracks for a limited number of plays for free.

Mashboxx is designed to work closely with the technology company Snocap, headed by Napster founder Shawn Fanning, which identifies songs by their digital "fingerprint" and determines if they are copyrighted.

The efforts of Snocap and Mashboxx got a boost from the U.S. Supreme Court this week. The court ruled that Grokster could be held liable for copyright infringement, in part because it had taken no steps to prevent users from sharing copyrighted music and movie files.

Sony BMG Chief Executive Andy Lack told Reuters after the Grokster ruling that he had hopes that unauthorized peer-to-peer services would change their tune by utilising technology like Snocap's.

"There's an opportunity to employ lots of different technologies that legitimise these file-sharing services," he said. "A lot of them didn't want to come to the table until this ruling."

Snocap has deals in place with all four major music labels -- Vivendi's Universal Music, Sony BMG, EMI and Warner Music. Rosso said on Wednesday that negotiations are under way with the other music majors as well as a number of independents.

Sony BMG is a 50-50 joint venture between Sony Corp (NYSE:SNE - news) and Bertelsmann.

(Additional reporting by Derek Caney in New York)

Copyright 2005 Reuters Limited.

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