BMG to Share MP3.com Settlement More Widely
By Sue Zeidler
LOS ANGELES (Reuters) - BMG on Tuesday said it would share damages -- estimated by industry sources to be $20 million -- from a lawsuit against MP3.com Inc (NasdaqNM:MPPP - news) with all of its artists whose copyrights were infringed by the company.
``BMG plans to share its MP3.com settlement with all of our infringed-upon artists, even if not stipulated by their agreements,'' said Bob Jamieson, president and chief executive officer, BMG North America.
A spokesman for BMG, the music and entertainment division of Bertelsmann AG (news - web sites) (BTGGga.D), said Tuesday's statement was an expansion from the company's earlier indications it would share damages only with artists who had contract stipulations requiring it to do so.
BMG is home to such artists as Carlos Santana, Christine Aguilera and the Dave Matthews Band. Industry sources said thousands of artists at BMG had works infringed upon by MP3.com. But legal experts have said that as many as 20 percent to 30 percent of recording contracts lack provisions requiring they participate in settlements.
Billboard Magazine reported earlier this month that several groups were displeased with BMG's stance on the settlement issue. A spokesman said BMG had been reviewing the settlement process for several weeks.
BMG said it is also making an allocation to its music publishing arm, which will share the money with songwriters.
``We value our relationships with our artists and we feel this is the best course to take to foster those relationships. It is our plan to begin crediting our artists' accounts just as soon as all of our recordings and artists have been identified,'' Jamieson said.
French Media giant Vivendi Universal (EAUG.PA) earlier this month said it would buy one-time legal foe MP3.com. Mp3.com's stock had been hammered in the past 16 months due to several reasons, including a year-long legal battle with the five largest record labels in the world.
In January 2000, MP3.com began offering a service called My.MP3.com that allows users to store music digitally and then access via any computer connected to the Internet.
The service included a database of over 80,000 albums copied by MP3.com, which the record labels and publishers argued violated copyright law.
In April 2000, a federal judge ruled against MP3.com, which ultimately led to a shutdown of the service and an estimated payout of over $160 million to the five major record labels -- Universal, Sony(6758.T), Bertelsmann AG's (BTGGga.D) BMG Entertainment, AOL Time Warner Inc.'s (NYSE:AOL - news) Warner Music Group, and EMI Group Plc (news - web sites) (EMI.L) -- and music publishers.
Universal refused to settle with MP3.com and was ultimately rewarded with a judgement that was believed to be more than the $20 million the others received.
A BMG spokesman declined to confirm the company's share of the settlement.
All the other labels have said they would split the money with artists, regardless of contract wording.
