UK software company Wippit released Thursday an alpha version of a song-sharing program which it claims will reward music labels and artists when their music is copied online. The software, also called Wippit, allows users to share MP3 digital music files across the Internet. Unlike other peer-to-peer clients, such as Napster and Scour which are accused by music labels of violating copyright, Wippit claims to have developed a way to pay a royalty fee whenever a song is copied. According to Wippit, its software can read identification tags (known as ID-3 tags) that are embedded into every track of a music CD when it is manufactured, and which remain if a track is converted to an MP3 file. These tags contain information about a song including title, artist and record label. All Wippit file transfers will be recorded, so the company claims it will know the royalty payment that each record company is owed. However, the company has not yet made any deals with record labels, casting doubts on the legality of its service. "At the moment it's a grey area legally," admitted chief executive officer Paul Myers. "We'll have to see if Napster wins or loses its case. If the RIAA withdraws its case and Napster isn't found guilty [of copyright infringement] then there isn't a legal precedent", he claimed. According to latest reports, the RIAA (Recording Industry Artists of America) is still pursuing its case against Napster, despite Tuesday's deal with Bertlessmann's BMG. Wippit said it released the alpha, or primary test, version of the software so users could check it for errors. Myers admitted that releasing the alpha version of Wippit was something of a gamble. "Yes, it's a risk but all the best things are", he declared. "If Napster loses then it depends on whether or not we have made deals with record labels by then." Some record labels are embracing the idea of distributing music on the Internet. BMG and Napster plan to charge $4.99 (about £3) for subscription based music download service, although details are still vague. Universal Music, another big record label, is currently testing a subscription service for digital music. Wippit users will have to pay for a yearly licence, which Myers describes as "a low fee", to use the software after which they will be allowed unlimited downloads. The amount of money a record company will receive each time one of its CDs is swapped through Wippit is much less than it would get if the album is bought in a shop, but Myers claims that users will take advantage of the potential of unlimited downloads. "Because they only pay a yearly fee, users will get hold of much more music than they have purchased before, which ultimately means more money for the record company," Myers claimed. Take me to the MP3 Special To have your say online click on the TalkBack button and go to the ZDNet News forum. Let the editors know what you think in the Mailroom. And read what others have said.