The U.S. House of Representatives Holds Hearing on Music and the Internet
Testimony heard last week before the U.S. House of Representatives
Subcommittee on Courts, the Internet and Intellectual Property indicated that the entertainment industry was looking
to Washington for solutions on how to use Web distribution to better serve
customers. That theory, however, was blown out of the water just a few days
later when Vivendi Universal announced that it would acquire San Diego-based
MP3.com in a $372 million agreement.
As the proud owner of one of the top worldwide Internet brands, Vivendi
expects to strongly reinforce their digital efforts in the areas of online
music, subscriptions, branding, technology and all its content.
At last week's house hearing, Vivendi Universal Executive, Vice Chairman Edgar
Bronfman, expressed, for what are now obvious reasons, an optimistic view of
music and the Internet.
"The challenges to the secure digital distribution of music and other
intellectual property are significant," Bronfman explains. "As such, the
process of their resolution is sometimes frustrating and always time consuming.
However, the opportunities are vast and our determination to achieve a
robust digital marketplace for music intensifies everyday. In that brave New
World, we and our retail partners will be able to reach every consumer that
has an Internet connection. Consumers in small towns will then have the same
access as those who now live near large retail outlets. Shelf space will not
be an issue, so back catalog will be right next to the recordings at the top
of the charts."
Now it seems Vivendi has cornered that robust digital marketplace. As the
premier distributor of music on the Internet, MP3.com features, and will
continue to feature, content from the 'big 5' record labels and independent
artists & labels. There are currently over 150,000 artists from more than 180
countries that make their music available to music fans through MP3.com, and
more than 25% of Billboard Magazine's current Top 40 albums are being
promoted on MP3.com. The total aggregate audience for MP3.com, and Vivendi
partners GetMusic, FarmClub and EMusic, represents close to 40 million
registered users, with approximately 120 million monthly page views.
Now that MP3.com is owned by one of the industry's top recording companies,
the members of the American Federation of Television and Radio Artists
(AFTRA) could be in for a longer fight. The union representing recording
artists is urging Congress to effectuate its intent that performers share
copyright license fees from music on the internet by ensuring that the license
fees which Congress earmarked for artists go directly to them, rather than
pass through other entities, such as recording companies.
AFTRA's Director of Sound Recordings, Ann Chaitovitz, testified that while
copyright law mandates that recording artists receive a portion of the
revenues derived from Internet broadcasting of their work, direct payment to
them, rather than to third parties, will ensure proper and timely
compensation and eliminate the need for expensive audits.
MP3.com President Robin Richards explained that these negotiations are within
reach, but are also complicated and time consuming.
"MP3.com looks forward to
working with Congress to develop a legislative proposal that rationally
balances the interests of copyright users, copyright owners, and - most
importantly - consumers," Richards said. "However, we recognize that enacting
copyright reform could take time. And time is one thing that Internet-based
technologies don't have in unlimited quantity. For example, MP3.com has a
loyal following of music lovers who have purchased CDs and who want to use
our service as a convenient way of listening to the songs on those CDs. We
have millions and millions of dollars worth of licensing agreements with the
record labels. But we still can't give consumers access to all of their music
- and this is a problem that will be faced by every Internet music provider -
because right now there is no practical way to contact all of the music
publishers with copyright ownership claims in the more than 900,000 songs in
our digital library."
While key players in the digital distribution and recording communities
continue to discuss, testify, argue and occasionally reach agreements, the
consumers will continue to watch with curiosity to see how will the new
Vivendi Universal agreement affect this ongoing dilemma.
AFTRA - www.aftra.org
Billboard - www.billboard.com
Emusic - www.emusic.com
Farmclub - www.farmclub.com
Get Music - www.getmusic.com
MP3.com - www.mp3.com
U.S. House of Representatives Congress Committee on the Judiciary - www.house.gov/judiciary/
Vivendi Universal - www.vivendi.com
Related MusicDish e-Journal Articles:
» Markets are funny. Ask MP3.com - Vivendi Universal Acquires MP3.com (2001-05-21)
» The Senate Judiciary Hearings: 'Me! -- No, Me! -- NO! ALL OF US!' (2001-04-09)
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