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murrayhill

05/18/01 5:45 PM

#2255 RE: cksla #2246

CKSLA: Meanwhile, on another front
I talked at some length this morning with Elissa Hecker, chief legal counsel to the National Music Publishers Association. She had just returned from the hearings on Internet music and provided me some good insight into the status of the "negotiations" between the labels and the music publishers. Despite her credentials as an attorney, Bob, she was candid and quite forthcoming about her feelings regarding the current differences that exist between her constituency of publishers and writers and the labels.

They (NMPA) has asked the major content providers to bring their proposals and varying business models to the negotiating table, but thus far they have not been very successful in agreeing on a working revenue model for compensating writers and publishers; since the public knows very little about how these people are paid, in the first place, it may come as a bit of a surprise to learn that they are asking for in excess of $.075/ streamed song. This is in addition to the $.005 that BMI and (I believe) ascap have already negotiated as a blanket royalty for the performance right, alone.

While we discussed many nuances of the current impasse, it is sufficient to mention that it may be some time (6 months to a year) before a package of acceptable royalty agreements are in place between these opposing parties. Before any model for actual dowloading can exist between the labels and say, Realnetworks, the labels will have to settle these questions of royalties to be paid with the writers, publishers and administrators of the PA copyrights. M(over the)H