House Subcommittee to Gauge Views on 'Net Music Licensing
by Dave Brigham
May 16, 2001
industry . policy-law
Members of the music industry will present widely divergent views on Internet
music licensing in testimony before a U.S. House subcommittee hearing
Thursday.
The House Subcommittee on Courts, the Internet and Intellectual Property is
collecting data on the status of music licensing negotiations, and considering
how performers and songwriters will receive royalties for use of their work. At
issue is whether Congress should put laws into effect spelling out terms on
how record companies should license music for commercial use on the
Internet.
At the hearing, MP3.com President Robin Richards will advocate for the need
for compulsory licenses, according to an MP3.com spokesman. Many online
music companies, including MP3.com and Napster, feel that record labels
have been too slow to license music for commercial services.
MP3.com has been busy on Capitol Hill, lobbying Congress since last fall to
support the Music Owners' Listening Rights Act of 2000 [see 10.02.00
Copyright Bill Faces Uphill Battle]. The act would let companies copy CDs,
store them online and stream music to users who can prove they own the CD.
MP3.com offers such a service, but had to pay tens of millions of dollars to
major label groups and publishers to settle lawsuits over the service.
Rep. Rick Boucher (D-Va.), who introduced the Music Owners' Listening
Rights Act last year, plans to reintroduce the bill this year.
Plenty of opposition to MP3.com's viewpoint is expected. For tomorrow's
hearing, the American Society of Composers, Authors and Publishers
(ASCAP) recruited singer-songwriter Lyle Lovett to stress that "the clamor for
a compulsory license is misplaced," according to Ben Palumbo, the
performing rights organization's representative in Washington, D.C. While
firmly behind the notion that songwriters need to be compensated for music
use online, ASCAP believes that the marketplace for digital music should be
allowed to develop without government oversight, Palumbo said.
ASCAP has signed licenses with more than 2,200 web sites since 1996,
Palumbo said. "ASCAP has never turned down anyone," he added.
Major labels and their trade group, the Recording Industry Association of
America (RIAA), support ASCAP's view. At a Senate Judiciary Committee
hearing last month, RIAA President and CEO Hilary Rosen assured the
members that they needn't get involved in licensing procedures [see 04.03.01
Sen. Hatch Hopeful Congress Can Avoid Compulsory Music Licensing].
Edgar Bronfman Jr., executive vice chairman of Universal Music Group parent
Vivendi Universal, is scheduled to testify before the subcommittee tomorrow.
A source familiar with Bronfman's proposed testimony said that as of
Wednesday afternoon, the text was "still being worked on."
Others slated to give statements before the subcommittee include songwriter
Mike Stoller ("Hound Dog," "Stand by Me"), appearing on behalf of the
National Music Publishers' Association (NMPA), and RealNetworks Chairman
and CEO Rob Glaser. Glaser will present the first public preview of MusicNet,
the digital music platform the company is developing with AOL Time Warner's
Warner Music Group, EMI Recorded Music and Bertelsmann's BMG
Entertainment.
The subcommittee is the latest government body to collect information on
compulsory music licensing by major label groups for online services. The
U.S. Copyright Office has been collecting information in advance of
proceedings on rates for compulsory licenses beginning July 30, and the
Senate Judiciary Committee held a hearing last month on digital music.
In advance of the Judiciary hearing, major label groups issued well-timed
announcements touting music licensing deals, albeit between themselves
[see 04.02.01 RealNetworks to Launch Subscription Platform with Labels].
RealNetworks announced the MusicNet joint venture, which will license its
platform to companies hoping to offer online subscription services featuring
music from MusicNet's three label partners. That same week, Universal Music
and Sony Music Entertainment trumpeted a pact to promote their jointly
developed Duet subscription service with Yahoo [see 04.05.01 Yahoo to
Market Duet Music Service, Music Strategy Still Unclear].
One industry source said that when the label groups officially launch Duet and
MusicNet, Congress is likely to scrutinize the services to ensure that they are
being presented in a "consumer-friendly" environment.
Interestingly, Bronfman and Stoller are opponents in an ongoing court case.
Last December, Stoller and songwriting partner Jerry Leiber joined music
publishers the Rogers & Hammerstein Organization, Irving Berlin Music and
MPL communications in a lawsuit against Universal Music, claiming that the
label group used the publishers' compositions in a test version of
Farmclub.com's subscription service without the publishers' permission.
The House Subcommittee holding Thursday's hearing is chaired by Sen.
Howard Coble (R-N.C.), who spearheaded last year's successful House
repeal of the "work for hire" bill that made it virtually impossible for artists to
recover the rights to their recordings [see 09.20.00 U.S. House Approves
"Work For Hire" Repeal]
A spokesman for the subcommittee said that because there are so many
issues to consider surrounding Internet music licensing, the subcommittee's
next step is unclear. "We don't know where we're going with it at this point," he
said.
