Record labels sign licensing deal with Napster

Independent British record labels representing bands such as Moby and the Stereophonics have signed a licensing deal to distribute music through the controversial internet site, Napster.

The Association of Independent Music (AIM), whose members represent more than a quarter of the UK market, and the Independent Music Companies Association (Impala) announced the deal yesterday, in a move that helps to ensure Napster's future.

The internet site, which had formerly offered music for free, was crippled after a United States appeal court ruling barred it from infringing the copyright of major record labels. The industry has been increasingly concerned by the loss of rights payments caused by internet users downloading music files illegally.

It has since signed a deal with three of the main record labels that have taken it to court – Warner Music, Bertelsmann and EMI – and plans to launch a membership-based service this summer.

The latest deal legitimises Napster broadcasting tracks from some of Britain's most popular music. The deal includes more than 150 record labels, such as the Beggars Group, Wall of Sound and Ministry of Sound and musicians including Muse, Ash, Badly Drawn Boy, Tricky and Belle and Sebastian.

Hank Barry, Napster's chief executive officer, said: "Later this summer, the new Napster will launch. Independent artists who record for the labels represented by AIM and Impala will be the first to benefit, thanks to the forward-looking leadership shown today."

Alison Wenham, AIM's chief executive, said Napster was a catalyst for change in the same way that pirate radio stations such as Caroline and Luxembourg prompted a shake-up in Britain. She said: "It's great that we have been able to partner these two things – creativity and technology."