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Napster, Songwriters and Music Publishers Reach Settlement and Licensing Agreement

24 Sep, 2001 By: Hive News

U.S. songwriters and music publishers have reached preliminary agreement with online file-sharing service Napster to settle the class-action lawsuit currently pending in federal court in California, according to a Napster press statement.

The agreement also includes terms under which the songwriters and music publishers will license their music to Napster's new membership-based service.

The announcement of the proposed settlement was made jointly by Edward P. Murphy, president and c.e.o. of the National Music Publishers'Association Inc., Gary L. Churgin, president and c.e.o. of the Harry Fox Agency Inc., George David Weiss, president of the Songwriters' Guild of America Inc., and Napster president and c.e.o. Konrad Hilbers.

The deal is now subject to the approval of Chief Judge Marilyn Hall Patel of the United States District Court for the Northern District of California, by the plaintiffs in the class action, and by the NMPA board of directors.

According to Napster, the parties are optimistic that the agreement will beapproved by the court, and thanked several key members ofCongress for their support throughout the negotiations, including Senate Judiciary Committee chairman Patrick Leahy (D-VT), ranking Minority Member of the Senate Judiciary Committee Orrin Hatch (R-UT), and members of the House Judiciary Committee.

"We are very grateful for the encouragement provided by these legislators, all of whom helped to ensure that the parties kept talking productively until an agreement could be reached,"commented NMPA's Murphy.

"The good faith displayed byNapster while negotiations proceeded, and its agreement to pay fair compensation to creators and copyright owners for past and future uses of musical compositions on its service, led to a proposal that songwriters and music publishers can embrace. We are excited that songwriters will be able to reach new fans in the digital age through Napster."

"We are pleased to have secured such an important element in creating our new service, one that will benefit songwriters, artists and consumers alike," said Konrad Hilbers, c.e.o. of Napster. "This landmark agreement marks a huge steppingstone toward building a digital music marketplace and we're pleased to have played such a key role in moving the market forward."

"You can mark this date on your calendar," said SGA's George David Weiss, composer of such classic musical standards as "Can't Help Falling in Love," "What A Wonderful World" and "TheLion Sleeps Tonight." "Today, the American music community and the online community together took a giant leap forward. This settlement, which only a few weeks ago seemed a near-impossibility,will hopefully lead to immediate and unprecedented growth in the licensed use of music on the Internet."

"Today I am extremely pleased to celebrate the beginning of a new Napster," announced Martin Bandier, chairman and c.e.o. of EMI Music Publishing Company. "A Napster that, like its predecessor, will empower millions of people to share their passion for music. A Napster that, quite unlike its predecessor, will respect the rights of those who create that music. In partnership we will be able to tap the immense potential that the Internet offers in bringing music, legitimately, to a new and expanding audience."

The terms agreed to by the parties include the payment by Napster to music creators and copyright owners of $26 million in settlement of damages for past, unauthorized uses of music. Napster will also render an advance against future licensing royalties of $10 million, under a payment structure based on the Audio Home Recording Act. That legislation allocates to songwriters and musicpublishers royalties in a one-third to two-thirds ratio with copyright owners of sound recordings.

The Harry Fox Agency Inc. the licensing subsidiary of NMPA, will license rights, collect and distribute royalties, and monitor compliance under the agreement, on behalf of the copyright owners of musical compositions.

"Today's announcement with Napster sets an important precedent for licensing music used on the Internet," stated HFA's c.e.o. Gary Churgin. "It recognizes the exceptional value of the musical compositions owned and controlled by American songwriters and music publishers. The Harry FoxAgency is pleased to provide the new Napster with access to our electronic licensing system on behalf of our publisher principals."

Napster intends to launch its new membership-based file-sharing service later this year with recordings from hundreds of independent record labels. Napster will also separately offer musicfrom the BMG, EMI and AOL/Time Warner labels through MusicNet.

Legendary songwriters Jerry Leiber and Mike Stoller, who wrote "Stand By Me," "You Ain't Nothin' But A Hound Dog," "On Broadway" and "Poison Ivy," as well as Frank Music Corp., are the representative plaintiffs in the action.

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