Music publishers sy they have reached a tentative licensing agreement with online music company MP3.com in San Diego that will allow MP3 to use more than one million songs as part of its web-based service.
The MP3 service allows consumers to listen to music from CDs they already own or that they buy from MP3's retail partners.
The agreement was announced by the National Music Publishers' Association (NMPA), and its licensing subsidiary, the Harry Fox Agency (HFA). The deal still has to be approved by the individual music publishers as well as the US District Court for the Southern District of New York.
The court ruled in April that MP3 infringed upon copyright law by creating a database of about 80,000 songs - without the permission of the music publishers or recording companies - that users could access from any computer.
Since that time, MP3 has settled with four of the five major record labels that sued the online music company for copyright infringement.
Under the terms of the new agreement, MP3 will pay music publishers $US30 million over three years for the right to use approximately one million songs on My.MP3.com, which allows consumers to store music digitally and access it via any computer. The money will cover MP3's past use of member publishing companies' music as well as royalty payments for future use. Under the royalty terms, MP3 will pay a quarter of a cent each time a consumer accesses a song, as well as a one-time fee each time a user stores a song on My.MP3.
Robin Richards, president and chief negotiator of MP3 says, "[This agreement] is a giant step for all consumers who want simply to be able to listen to music they already own. . . . Today the American public won."
The music publishers association was also pleased with the proposed settlement.
"This is a win for the music publishers, a win for us and a win for the songwriters and the public," says Edward Murphy, president and CEO of the NMPA, in a telephone interview. "This might seem like a small amount of money but [the publishers and songwriters] need it for their livelihood."
Jonathan Moskin, an intellectual property attorney at Pennie & Edmonds in New York says this settlement suggests a move toward a more realistic appraisal of copyright owners.
"It also suggest that the ability to do business on the internet is not a free ride," he says. "In the legal sense, this [agreement] is a reality check and stands in contrast to the prevalent sense that had existed in the early days of the Internet -- that it was a wild west atmosphere where no rules applied."
Ken Dort, a copyright attorney at Gordon & Glickson LLC in Chicago, says although this settlement will ultimately not decide anything legally, it will still send a message to others who might think about doing something similar in the future.