Performance rights organization BMI is taking major steps towards creating a legal, for-profit peer-to-peer network. BMI has signed licensing and DRM agreements with QTRAX and Xpeer, two P2P sites set

Performance rights organization BMI is taking major steps towards creating a legal, for-profit peer-to-peer network.

BMI has signed licensing and DRM agreements with QTRAX and Xpeer, two P2P sites set to launch this fall. The move signals progress towards finding middle ground between the record industry, songwriters, publishers and the P2P software industry.

The sites will use the QTRAX file format, which uses DRM to secure the music within its environment and enables users to download & play songs for free on their PCs. Users can then pay a fee to burn the restricted files to CD or download them to an MP3 player. These transactions will result in the automatic reporting of performance data to BMI while retaining user anonymity.

The QTRAX network will also contain targeted advertising to fund the distribution of royalties to artists.