In a landmark agreement, the National Music Publishers' Assocation (NMPA), the Harry Fox Agency (HFA) and the Recording Industry Association of America (RIAA) have confirmed a licensing structure for streaming music for new Internet-based subscription services.
According to the agreement, the HFA will issue licenses to new services that offer on-demand streaming and limited downloads. Once rates are determined, royalties will be payable on a retroactive basis from the beginning of the service. Also, the RIAA will pay the HFA an advance of $1 million toward the yet-to-be-determined royalty rate. If the RIAA and the HFA do not settle on a rate in the next two years, the RIAA will pay monthly advances totaling $750,000 a year until the rate is set.
The U.S. Justice Department has expanded its antitrust investigation into online music ventures by sending civil subpoenas to the RIAA and members of MusicNet and Pressplay. The DOJ will determine the extent to which the industry has sought to control the distribution of music over the Internet by working together to determine rates, copyright procedures and licensing practices.
In other RIAA news, the Motion Picture Association of America (MPAA) and the RIAA filed a lawsuit in U.S. District Court for the Central District of California for copyright infringement against a number of music and movie-sharing services, including MusicCity.com and MusicCity Networks (which runs the Morpheus service).
The court document describes attempts by the RIAA to notify MusicCity that it was infringing on copyrights. The plaintiffs charge that instead of ceasing and desisting, the service expanded its file-sharing offerings through the Morpheus network, allowing movies, images and software to be traded, including not-yet-released-for-rental films Planet of the Apes and Legally Blonde.
Representatives at MusicCity were unavailable for comment.