Record industry agrees with music publishers on online licensing

Tuesday, October 9th 2001, 12:00 am
By: News On 6

NEW YORK (AP) _ The recording industry announced a licensing agreement with songwriters and music publishers Tuesday that will help clear the way for industry-backed music distribution over the Internet.

The deal allows members of the Recording Industry Association of America, which includes all five major labels, to license for online use any song from the Harry Fox Agency, the largest in the industry.

The recording industry is hoping to launch two online music subscription services later this year. Sony and Universal have teamed up to form pressplay; the other three major labels _ Warner, EMI and Bertelsmann's BMG _ are backing the rival service MusicNet.

``This agreement removes a major legal roadblock for the new online subscription services,'' RIAA president and CEO Hilary Rosen said in a statement. ``The coming subscription services may now begin licensing thousands of musical works immediately.''

Napster reached its own agreement with music publishers last month.

Harry Fox Agency, a subsidiary of the National Music Publishers' Association, represents 27,000 music publishers who in turn represent the interests of more than 160,000 songwriters.

The licenses will cover both the streaming of music as well as limited downloads of music files, meaning ones that can be played only for a limited time or for a limited number of playbacks.

The rates have yet to be determined, but the RIAA will pay the agency an advance of $1 million as part of the arrangement. If the two sides do not settle on a rate during the next two years, the industry will pay monthly advances totaling $750,000 per year until a rate is set.