updated 10/29/2004 6:37:16 PM ET 2004-10-29T22:37:16

Sony BMG Music Entertainment and online peer-to-peer software distributor Grokster are working on a new venture that is expected to offer paid and free song downloads over the Internet, sources say.

Details of the venture, dubbed Mashboxxx, haven't been finalized but the service would allow users to download promotional versions of songs by Sony BMG acts at no charge and buy licensed versions, sources familiar with the venture told The Associated Press on condition of anonymity.

Currently, file-sharing services like Grokster enable computer users to search, download and distribute music files of all types, but most are copies of CD-quality recordings.

A spokesman for Grokster Ltd. confirmed the two companies are working on the new service, but declined to elaborate.

The planned venture, which would represent the first serious partnership between a major recording company and an established file-sharing company, was first reported Friday in the Los Angeles Times.

Officials at Sony BMG declined to comment on the matter Friday.

Other industry sources confirmed the company has been working with file-sharing companies to find a business model that does not involve the freewheeling swapping of copyrighted music files, which the music industry complains saps its sales.

Since the emergence of free online music sharing, recording companies have sought to litigate the file-sharing companies out of business. Failing in that effort, the industry has also lobbied Congress to outlaw the firms altogether.

While some independent labels and artists have experimented with making their music available for sale over file-sharing networks, the major recording companies have refused to do so.

That stance may be on the road to reconsideration, however, as advances in digital fingerprinting technology can purportedly allow filtering of unauthorized song copies to be excluded from file-sharing networks.

Mashboxxx is expected to employ a version of such technology that has been developed by San Francisco-based Snocap Inc., sources said.

Calls to the company, which was launched by Shawn Fanning, creator of the original Napster file-swapping network, were not immediately returned Friday.

The planned collaboration was spawned after months of discussions between Sony BMG chief executive Andrew Lack and Wayne Rosso, chief executive of Mashboxxx and one-time head of Grokster, sources said.

Rosso declined to comment Friday.

Word of his role in the venture of a recording company-friendly file-sharing service follows news earlier this week that he, Grokster owner Daniel Rung, and three other executives recently settled a copyright infringement lawsuit filed against them by recording companies over a Spanish Web site that was selling song downloads without permission.

As part of the settlement, Rosso, Rung and the other Puretunes.com operators agreed not to engage in any activity that would violate music company copyrights, including operating a file-sharing service that distributes copyrighted files without permission.

Copyright 2004 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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