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NMPA inks deal OK’ing MP3 service

Netco to pay Harry Fox up to $30 mil

NEW YORK –The National Music Publishers’ Assn. called a truce with embattled music download site MP3.com Wednesday, inking a licensing deal that helps clear the road for the Netco’s controversial My.MP3.com digital music locker service.

Under the terms of the three-year agreement, MP3 will pay the NMPA’s Harry Fox Agency division up to $30 million for a two-part fund.

The first part will go toward back royalties accrued on works licensed by the NMPA’s constituent publisher members since the launch of My.MP3 last year.

The second part will be an advance on future uses of works licensed, contingent upon the approval of the NMPA’s 25,000-strong membership. The number of songs covered under the deal could potentially exceed 1 million, the trade group said.

The My.MP3 service allows subscribers to stream copies of songs stored on MP3’s servers, provided they either prove that they already own the track on CD or else purchase it digitally from the MP3 site.

Under the pact, the company will pay one-quarter of a penny every time a My.MP3 member streams a song, plus a one-time fee for each song added to the service’s online offerings.

NMPA prexy-CEO Edward P. Murphy noted that while the agreement works out well for all concerned, it did not come without some initial challenges.

“We communicated early on with MP3.com, but we had some trouble seeing eye to eye on copyright issues,” he told Daily Variety. “It took the assistance of the court, but we finally got their attention.”

Despite those conflicts, Murphy maintained that “there’s definitely a market out there” for services like My.MP3 and, when properly licensed, they could improve the lots of the industry and consumers.

Deal follows a protracted series of legal battles between MP3 and virtually all the major players in the music industry. Earlier this year, the Recording Industry Assn. of America, along with the five major labels and the NMPA took the Netco to court, alleging that the My.MP3 service flouted music copyrights.

MP3.com has since settled with four out of the five labels for a reported $20 million each, a dispute with Universal Music is ongoing. MP3 plans to relaunch MyMP3 in the next few weeks, and for now it plans to exclude Universal content from its offerings.

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