Out-Law News 1 min. read
04 Apr 2001, 12:00 am
On Monday, AOL Time Warner, Bertelsmann AG and EMI Group announced their plans to launch MusicNet this Summer, a subscription-based MP3 download site to be operated with the assistance of software company RealNetworks. The MusicNet service would combine the back-catalogues of the three music industry giants. While some commentators are suggesting that the intention of MusicNet is to sink Napster, Bertelsmann is the only one of the five major record labels that sued Napster to later agree settlement terms with it, with the German company taking an option to hold a controlling interest in Napster.
Microsoft is also joining the on-line music market with its MSN Music service, announced today. It offers thousands of internet radio stations to users, similar to the music preference service of Spinner.com. It is not an MP3 download service – there is only music streaming; nor is it offering songs on demand. Users can only select channels that play their favourite type of music or regularly play their favourite artists.
Napster CEO Hank Barry told the Senate Judiciary Committee that Congress should pass an Act to establish a flat royalty rate for copyright holders that includes a direct payment to artists. He said: “Licensed music should now be available over the internet as it is over the radio.”
Barry then gave an example of the various rights contained on a typical CD, explaining how there are typically 13 sound recordings and 8 separate music publishers for every album. There are 3,000 record companies in the US, 25,000 music publishers and 27,000 new CDs every year. “Separate individual negotiations for all these rights are simply not a viable option. This has led to endless private negotiations and litigation.”
This view, he said, was consistent with that held by Napster’s long-time nemesis, the Recording Industry Association of America (RIAA).
Senators criticised the music industry for its slow reaction to the internet as a music delivery medium.