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Napster, Music Publishers Reach Preliminary Settlement

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NEW YORK -- Napster Inc. and the groups representing U.S. music publishers and songwriters have reached a preliminary agreement to settle their copyright lawsuit, executives from Napster and the groups announced Monday.

In a conference call, the executives said the settlement -- which must be approved by a federal judge, plaintiffs in the class-action suit, and the board of a music publishing industry group -- will include a $26 million payment from Napster to the plaintiffs.

Konrad Hilber, Napster's chief executive, and executives from the National Music Publishers' Association Inc. and the Harry Fox Agency said the groups have also agreed on the terms under which Napster is to compensate publishers and songwriters when it relaunches its service later this year.

In addition to the $26 million, Napster, Redwood City, Calif., plans to pay publishers one-third of the total payments it will set aside for copyright holders. That would appear to leave roughly two-thirds for record companies, although Napster has yet to settle its suit with the recording industry.

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