MP3 digital détente

Labels BMG, Warners settle copyright suit

BMG Entertainment and the Warner Music Group separately announced that they’ve settled their copyright infringement suits with MP3.com.

The netco still faces similar lawsuits from the other three major label groups, one indie record label and a music publishing agency.

BMG and WMG also have granted licenses for their respective sound recordings on the My.MP3.com online service, which allows consumers to store and replay music that they’ve already purchased. These licenses pertain to streaming content — not digital downloads — and are non-exclusive.

MP3.com (MPPP) stock closed at $19.19 on Friday, the day of the official announcement — up from Thursday’s close of $17.25. The stock, which hit a 52-week high of $105, had previously fallen to a low of $6.50.

Terms undisclosed

Though terms of the agreements were undisclosed, each label group is expected to receive between $15 million and $20 million for punitive damages arising from the copyright infringement aspect of the legal action.

As for the licensing agreements, MP3.com reportedly will pay BMG and WMG 1.5 cents for every song stored on the My.MP3.com service and 1/3 of a cent for each time the song is streamed.

Each label group will share monies received from both the settlement and the licensing agreement with the individual labels under their corporate umbrellas. The labels will then flow money to their respective artists in accordance with the terms of various recording contracts.

RIAA rally

The original suit was brought by the Recording Industry Assn. of America (RIAA), which represents the interests of the five major label groups but is prevented by antitrust regulation from negotiating on behalf of its members.

The other three major record label groups — EMI, Sony and Universal — have yet to reach agreements with MP3.com. All are mum on when such settlements will be reached.

But even if MP3.com settles with this troika, it still must reach an agreement with indie label TVT Records, which filed a similar copyright infringement suit on May 24.

And although MP3.com has signed licensing agreements with public performance rights societies ASCAP and BMI, the netco also must contend with a copyright infringement suit brought by the Harry Fox music publishing agency back in March.

The Fox org represents 22,000 music publishing firms, including Paul McCartney’s vast, non-Beatles-related holdings and venerable Peer Intl., both of which are party to Fox’s suit.

At issue in the Harry Fox suit are the music publishing rights known as mechanicals, which are calculated on a record’s sales. The suits settled by BMG and WMG cover only the copyrights to the sound recordings themselves.

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