Legal P2P Service Close to Launch

Bertelsmann AG, the company that owned the original Napster, is preparing to launch a legal peer-to-peer download service in Germany for music and movies. Called GNAB, the service will debut first in the company's home country and then expand to others throughout 2006.

A company spokesman told the Associated Press Friday that most of the service is complete, and could offer access to 1 million songs at launch. Bertelsmann says the premise behind the P2P-like structure of the service is to prevent overloading of the servers.

Originally reported by BetaNews in March, Bertelsmann subsidiary Arvato is building GNAB - "bang" spelled backward. In order to access songs from the network, a user must first purchase the rights to download much like the traditional services.

Bertelsmann is joining a crowded market where the leader, iTunes, controls about 80 percent of legal downloads, leaving about a half-dozen other competitors with major label contracts to fight over the remaining 20 percent of customers.

iTunes recently added videos to its music store to support the release of its video iPod, including hit shows "Desperate Housewives" and "Lost," of which new episodes are made available the day after they air on television for $1.99 USD.

While P2P has come under fire from the record labels, several companies have looked into legitimate uses of the technology in order to save on bandwidth costs. The decentralized nature means less overhead and removes the need to build out an expensive network to handle end-user downloads.

Bertelsmann first joined the P2P race after it bought Napster in 2000. The company attempted to save the file-swapping service from shutting down entirely after repeated lawsuits from the Recording Industry Association of America, but eventually sold the Napster brand to Roxio.