Bertelsmann forms alliance with Napster

Once enemies, Bertelsmann AG BMG and Napster Inc. will now form an alliance to develop a peer-to-peer file sharing service, the German company announced Tuesday.

Bertelsmann AG’s newly formed eCommerce Group, BeCG, and Napster have developed a membership-based service that will provide file-sharing capabilities that “preserves the Napster experience while at the same time providing payments to the rightsholders,” the company said in a statement.

Napster and Bertelsmann will seek support from others in the music industry to accept Napster as a membership-based service, the companies said.

Once Napster implements the service, BMG will withdraw its lawsuit against Napster and make its music catalog available. Bertelsmann will provide Napster a loan to develop the new service. Bertelsmann spokeswoman Christiane Hach in G