From the New York Times:
At least five online file-sharing companies have started trying to reach an accord with the music industry to convert the free trading of copyrighted music on their networks to paid services, according to several recording industry and file-sharing executives.
The most advanced discussions are between the recording industry and Grokster, a small California company that has been sued by the entertainment industry, recording industry executives said.
Grokster has agreed in principle to be acquired by Mashboxx, a new company backed by Sony that is trying to start a legal file-sharing service, a person involved in the negotiations said. Mashboxx has made overtures to some file-sharing companies including eDonkey, Morpheus and LimeWire, but negotiations are not active, the person said.