×

Static for music biz

Justice Dept. probes online distrib services

The dog days of August have brought more than blistering heat for the recording biz, which is being asked to prove why two online music distribution services backed by the majors won’t snuff out competition.

Industry execs on Monday confirmed that the Dept. of Justice is conducting a preliminary inquiry into MusicNet and Pressplay, both of which are scheduled to bow within weeks. They said that such an inquiry was essentially assured when the European Union announced its own investigation earlier this summer of the two services.Both companies promise digital music tracks on a subscription basis, offering several thousand major-label tracks for a flat fee. MusicNet, which is backed by AOL Time Warner, Bertelsmann, EMI, Zomba Music and media software maker RealNetworks, has licensed its service to AOL, Real and Napster. Pressplay, a 50-50 venture between Sony and Vivendi Universal, has inked partnerships with Yahoo, Microsoft’s MSN Music and MP3.com.

The nascent music Netcos have declined to comment about the probe as yet. Sources close to the situation said at least one of the majors backing the companies has been in contact with the Justice Dept. in an attempt to hammer out a compromise, but the talks are still very preliminary.

Lawmaker chorus

Last Friday, two Capitol Hill lawmakers said they were likewise concerned about a possible monopoly by the majors, and they introduced legislation that would force music congloms to offer the same price and other conditions when striking licensing deals with unaffiliated Internet ventures.

Reps. Rick Boucher (R-Va.) and Chris Cannon (R-Utah) said they were alarmed that a distribution duopoly might be forming, and they promised hearings on their legislation when Congress returns in early September from the August recess.

Napster veep for public policy Manus Cooney, who was on hand as the lawmakers detailed their bill, said introduction of the measure was “encouraging” news.

Washington insiders cautioned that the DOJ probe is only preliminary in nature and that other Internet ventures have been likewise studied for possible antitrust violations.

Popular on Variety

More Digital

  • T.J. Dillashaw, right, kicks Cody Garbrandt

    Disney Plans UFC Broadcast for FX

    UFC matches will return to FX  – but not on a permanent basis. ESPN has been showing preliminary bouts to UFC pay-per-view events for the last while on ESPN and ESPN2, and then showing the main card on its ESPN+ subscription video service. In September, the early lineup will air on FX, which the UFC [...]

  • fundo logo

    Google‘s Area 120 Is Testing Fundo, a Crowdfunding Service for Creators (EXCLUSIVE)

    Google’s skunkworks lab Area 120 has been quietly testing an events-centric crowdfunding service for YouTubers, Variety has learned. Called Fundo, the service allows creators to invite their fans to virtual meet & greet sessions and other paid online events. A Google spokesperson confirmed the testing in a statement provided to Variety: “One of the many [...]

  • Telling Lies - Logan Marshall-Green

    Sam Barlow's 'Telling Lies' Government-Surveillance Thriller Game Sets Release Date

    After more than two years in the works, “Telling Lies” — the investigative thriller from acclaimed game creator Sam Barlow — is ready to take the stage. The game, produced with and released by Annapurna Interactive, will be available next Friday, Aug. 23, via Steam and Apple’s Mac and iOS app stores. “Telling Lies” will [...]

  • YouTube logo

    YouTube Will Stop Letting Copyright Holders Seize Revenue via Manual Claims on Very Short Music Clips

    YouTube is pushing back against overzealous copyright policing by music companies. Starting in mid-September, the video giant will forbid copyright holders from making manual claims to commandeer revenue generated by YouTube videos that include very short music clips (e.g., five seconds of a song) or “unintentional” music (like music from passing cars). “One concerning trend [...]

  • Chelsea Handler memoir book buy online

    Chelsea Handler Bonds With Alexa in iHeartRadio Smart Speaker Promo

    iHeartRadio has teamed up with Amazon to promote Chelsea Handler’s podcast “Life Will Be The Death Of Me.” Beginning this Thursday, users of Amazon’s Echo smart speaker and other devices with Alexa built-in can opt to get their mornings started with Handler cracking jokes and exchanging banter with the smart assistant. Users simply have to [...]

  • David Messinger, Activision Blizzard

    Activision Blizzard Hires CAA Veteran David Messinger as CMO

    Activision Blizzard tapped David Messinger, a former 15-plus-year veteran of CAA, as its first corporate-wide chief marketing officer. Messinger, based in Santa Monica, reports to Coddy Johnson, Activision Blizzard’s president and COO. It’s the first time the video-game company has appointed a CMO who will oversee the global marketing operations across all of Activision Blizzard [...]

More From Our Brands

Access exclusive content