It's been two years since the labels first took Napster to court, and after numerous court dates, court injunctions, court reversals and “trial periods,” it seems that the court only set a baseline from which the labels and Internet services must work. Case in point, the Internet services and the labels are beginning to figure out a royalty plan. The NMPA, HFA and RIAA did it last month, and this month, SoundExchange (the collection and distribution agency for sound recording performance license fees) began making direct deposits into artists' bank accounts — to the tune of $5.2 million. SoundExchange will now be under the joint control of recording artists (and their representatives) and record companies (and their representatives).
Royalty payments are the necessary end result of the collaborations, but isn't the actual service needed to bring in the payments? While MusicNet and Pressplay remain on pause, Full Audio, owned by Clear Channel Communications, plans on launching its own music subscription service. To start, the subscription service will be offered on a limited scale, at 30 stations in Chicago, Houston, L.A., Phoenix and Salt Lake City.
Meanwhile, Napster's not rolling over: CEO Konrad Hilbers wants the federal government to step in and create a compulsory standard requiring music labels to license their music at a fair price, rather than waiting for the legislature to pass the MOCA (Music Online Competition Act) that was presented to Congress in early August. And perhaps Uncle Sam will listen to Hilbers' plea now that Napster's going to be serving our country: In the wake of September 11, the Pentagon is considering using Napster's peer-to-peer service (the same one that got Napster in trouble to begin with) to help the military share information across its many branches, agencies, ships, airplanes, tanks and troops.
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