Kazaa Pays Out $100m to Music Business

Internet filesharing network Kazaa has agreed to pay the music industry more than $100m (£54.1m) in a global out-of-court settlement over the rights to downloaded music.

Under the terms of the deal, Kazaa's owner Sharman Networks will pay the world's four major music companies - Universal Music, Sony BMG, EMI and Warner Music - more than $100m and has undertaken to become a legal download service.

"There are very substantial damages being paid - in excess of $100m - and Kazaa will go legal immediately. They've had time to prepare for this," said John Kennedy, chairman and chief executive of the International Federation of the Phonographic Industry.

The EMI Music vice chairman, David Munns, added: "This is a victory for anyone in a creative industry that has had their works stolen and distributed through an illegitimate P2P network.

"While the award may seem like a vast pot of money, it will merely offset the millions we have invested - and will continue to invest - in fighting illegal pirate operations around the world and protecting the works that our artists create."

Mr Munns added that EMI hoped the settlement against Kazaa will "drive the creation of even more consumer-friendly ways to bring music to fans and generate new revenues for our artists and our business".

As the music industry has pursued attempts to curb internet piracy with lawsuits against filesharing companies like Kazaa and Grokster, legal services like Apple's iTunes have increased in popularity.

The IFPI said in a report published today that last year pirated CD revenues were worth $4.5bn, or more than one-in-three CDs sold worldwide, and that there were 20bn illegal downloads - roughly three for every person on earth.