To Pull Plug On Major Label Albums

Company calls move a 'good faith gesture.' will disable access to major label albums on its online CD-storage and playback service while it negotiates with those labels for a license to continue operating the service, the company said Wednesday (May 10).

The music industry sued in January, alleging that it needed a license to create the database of 80,000 albums at's core. Last month, a judge ruled that the service infringed industry copyrights.

"We regret the need to take this step, which inconveniences more than 500,000 account holders," President and Chief Operating Officer Robin D. Richards said in a statement.

"While we disagree with the court's decision, we also want to demonstrate our good faith and strong desire to achieve an expeditious business resolution."

The decision affects albums from the Big Five label groups: Universal Music Group (DMX, Shania Twain), Time Warner (Kid Rock, Madonna), Sony (Rage Against the Machine, Pearl Jam), BMG (Britney Spears, Backstreet Boys) and EMI (Smashing Pumpkins, Rolling Stones).

When a subscriber puts a CD into a computer disc drive while connected to the Internet, the service identifies the disc, then instantly puts MP3 copies of its songs in the user's online account.

Users can then listen to the music, but not download and save it, from any computer with an Internet connection. Chief Executive Officer Michael Robertson said Tuesday that the company is in serious negotiations with all five labels to secure licensing agreements for their catalogs. The company is talking with the Recording Industry Association of America to reach an agreement on penalties in the case, which could potentially reach billions of dollars. will restore access if and when a settlement is reached, Richards said.

At 7 p.m. EDT Wednesday, users still had access to such major label albums as Kid Rock's Devil Without a Cause (RealAudio excerpt of title track). spokesman Greg Wilfahrt said the company planned to disable access to major label albums by midnight PDT Wednesday.