MP3.com reaches tentative pact with publishers

NEW YORK (Reuters) -- Online music company MP3.com Inc. said on Wednesday it would pay up to $30 million to music publishers in a preliminary pact that would give it the right to use more than one million songs as part of its Internet-based service.

Under the terms of the deal, trade group National Music Publishers' Association and its licensing subsidiary Harry Fox Agency, will allow the songs to be used as part of a service called My.MP3.com, which allows users to store music digitally and then access it via any computer.

The service relies on a database of more than 80,000 albums that MP3.com initially created without the permission of the music publishers or the world's largest record labels that also own the rights to the music.

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A U.S. District Court ruled in April that MP3.com broke copyright law by creating the database. Since MP3.com has settled with four of the five major labels: Time Warner Inc.'s Warner Brothers music group, Sony Music Entertainment, BMG, the music unit of Bertelsmann AG and EMI Group. Time Warner is the parent company of CNN.com.

Seagram Co.'s Universal Music Group is the only major label not to have reached an agreement with MP3.com. Following a September ruling on damages by the same court, MP3.com could face up to $250 million in damages. MP3.com said it would appeal the decision.

The agreement requires the ratification of the member publishing companies and approval by the court. Independent publishers MPL Communications, which is controlled by former Beatle Paul McCartney, and Peer International Corp. also reached agreement with MP3.com.

Under the three-year agreement, MP3.com's maximum $30 million payment will cover payments to publishers for past uses of their music on the My.MP3.com service as well as advance royalty payments.

Under the royalty terms, MP3.com will pay a quarter of a cent each time a song is accessed on the service and a one-time fee each time a user stores a song on the service.

Copyright 2000 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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MP3.com
National Music Publishers' Association
  • The Harry Fox Agency, Inc.
Warner Bros. Online: Music
Sony Music
BMG
Bertelsmann - Media world Music
The EMI Group
Seagram: Music
MPL Communications
Peer Music

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