Kazaa Returns As Legal Subscription Service

Kazaa, the one-time rogue file-sharing application, is relaunched to the U.S. market today (July 20). Only this time it returns as an all-you-can eat legal subscription service, carrying a monthly rate of $20.

It will initially offer one million music tracks and ringtones licensed from the four major labels.

Kevin Bermeister, CEO of Kazaa's Australian-based parent company Altnet, tells Billboard.biz that negotiations are "way down the track to bring on board tracks from independent labels." Altnet is also in discussions with Hollywood film studios to offer downloadable movie content, adds Bermeister, who runs offices in Sydney and Los Angeles.

At this stage there are no plans to introduce the service in other territories. But Australia is earmarked as the next country for Kazaa to launch.

The service includes digital rights management and only allows users to play full track downloads on assigned PCs - they cannot be transferred to digital music devices.

Following the likes of Napster and Sweden's Pirate Bay, Kazaa is the latest service to shift towards a legitimate operation.

Altnet believes its approach of "focusing on that 90% of the market that no one else is focusing on" will pay off.

At its peak as an illegal file-sharing application, it had "tens of millions" of users and up to 4 million users at any one time, Bermeister says. "I believe it is possible to reach such numbers, because Kazaa is a powerful brand and its users were loyal," he adds.

Dutch inventors Niklas Zennstrom and Janus Friis developed the Kazaa software in 2001. It quickly rose to prominence following the first wave of peer-to-peer networks. They sold the software rights to Altnet a few years later, and went on to invent Skype and Joost.

Altnet and its subsidiary Sharman Networks were sued in U.S. and Australian courts by major labels and movie studios. In July 2006 it was announced that a settlement had been reached whereby the company agreed to pay $100 million in damages to the labels. Kazaa subsequently promised to turn legitimate.