Content owners settle with Kazaa

In a much anticipated case, Sharman Networks, a privately held company that operates file-sharing network Kazaa from Australia, agreed to pay $115 million to the music industry and Hollywood movie studios, which had accused Kazaa of aiding the illegal copying of music on the Internet.

Under the settlement, Sharman will pay the major record companies “in excess of $100 million,” John Kennedy, chief executive of the International Federation of the Phonographic Industry in London, told the New York Times. Sharman agreed to license music from the four major recording companies — Universal Music Group, Sony BMG, Warner Music and the EMI Group — that own the vast majority of music copyrights. Independent record labels are not included, but would be free to pursue licensing deals with Sharman.

The legal agreement, which follows a court ruling against Kazaa in Australia last year and a U.S. Supreme Court decision against other file-sharing services, now clears the way for Sharman Networks to offer a broad range of licensed content via Kazaa.

Kazaa said it now intends to become a legitimate online distributor of films and music. “All the parties involved now recognize the time is right to work together, and we are looking forward to collaborating with the music and motion picture companies to make P2P an integral part of the future of online digital entertainment,” Nikki Hemming, the chief executive of Sharman, told the Times.

Kazaa was a pioneer of peer-to-peer network software, which allows users to share music and movies over the Internet.