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Counterpoint Systems has completed a key rights management component of Napster's new membership service, which is scheduled to launch Q1 2002. Counterpoint's technology will track songs as they are shared through the Napster service so royalties can be accurately calculated and distributed to artists, songwriters and other rights holders.

Counterpoint Systems and Napster have been working together since March 2001 to customize Napster's new rights management system, the first of its kind to be deployed in a file-sharing environment.

"Counterpoint is thrilled to work with Napster to create a fundamental piece of its new membership-based file-sharing service," said Amos Biegun, Counterpoint Systems' CEO.

"Counterpoint Systems is providing us with the architecture to ensure accurate and timely compensation for artists, songwriters and other rights holders whose music is shared among members of Napster's new service," said Napster's CEO Konrad Hilbers. "Counterpoint's technologies are widely used and trusted throughout the music industry, which is why we selected them to develop this important piece of our new service."

About Napster

Founded in May 1999, Napster, Inc. pioneered person-to-person file sharing and created one of the most frequently downloaded software applications in the history of the Internet. Napster provides music enthusiasts with an easy-to-use, high quality service for discovering new music and communicating their interests with other members of the Napster community. The service enables users to locate and share music files, send instant messages to other users, and create Hot List bookmarks.

In October 2000, Napster partnered with Bertelsmann AG to develop a membership-based service. Edel Music and TVT Records joined the alliance in January 2001. In June 2001, Napster became a MusicNet partner and signed a landmark distribution deal with the Association of Independent Music (AIM) and the Independent Music Companies Association (IMPALA), two organizations that represent hundreds of European independent record labels. In September 2001, Napster signed a landmark accord with the National Music Publishers Association (NMPA) for a proposed licensing and settlement agreement.