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The aftershocks of the landmark agreement between Napster and Bertelsmann rumbled on Sunday as the Bertelsmann Music Group's chairman and CEO both resigned from the company.
Bertelsmann announced Sunday that BMG president and chief executive officer Strauss Zelnick offered his resignation, effective Dec. 31 of this year. Meanwhile, BMG Entertainment chairman Michael Dornemann will also resign from BMG's executive board early next year and would leave his chair position next spring.
The resignations come less than a week after Bertelsmann and Napster's alliance, the terms of which included Bertelsmann dropping its lawsuit and making its catalog available to Napster, once the California-based music-swapping software maker adheres to a subscriber service system that would clear it of copyright infringement. Reports cite that the two executives didn't share Bertelsmann Chairman Thomas Middelhoff's enthusiastic view of the deal and what would subsequently be altered roles for each within the company.
At the time he steps down, Zelnick will have served BMG for six years, having risen to his current position more than two years ago. Under Zelnick's leadership, BMG Entertainment has grown to an almost $5 billion entertainment entity, with Arista Records and RCA among its hundreds of labels and imprints.
Former BMG International head, Rudi Gassner, is reported to be in line to join Bertelsmann's board early next year and assume the role of chairman and CEO.
ANDREW DANSBY
(November 7, 2000)