TELECOM Digest OnLine - Sorted: Bertelsmann to Launch File-Sharing Service

Bertelsmann to Launch File-Sharing Service

Matt Moore (ap@telecom-digest.org)
Fri, 21 Oct 2005 17:31:19 -0500

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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