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Freeloaders Face the ChaosMusic

[Sydney, AUSTRALIA] Online music provider ChaosMusic has proposed a new levy on the distribution of digital music over the Internet in a step to establish a profitable business model to capitalize on the free transfer of music files.

In a letter to music associations and industry members, managers and record companies, ChaosMusic has proposed a levy to initially use the company's online music search tool, FreeTracks, as a standard method to generate a return for copyright owners.

From the creation of page impressions as a result of the FreeTrack search function comes the opportunity to generate advertising revenue and promote the physical carriers of digital music - CDs.

In an effort to recognize and renumerate copyright holders, ChaosMusic has suggested 15 percent of all advertising revenues generated before costs through FreeTrack should be directed to the appropriate royalty collection body, and in turn to copyright owners - songwriters, published, record labels and artists.

"We feel that this is a proactive and practical starting point for the Australian music industry," said ChaosMusic's chief executive officer Rob Appel. "In light of the legal battles in the U.S., we felt it was time that the industry organizations in Australia start cooperating with each other, in order to establish an acceptable standard for recognizing the copyright component of online music," he said.

The levy has been proposed to start immediately with all revenues collected to be placed in a holding account until an appropriate agreement between online retailers and the Australian music industry has been reached.

"It is clear that the popularity of online music and the unauthorized sharing of music will continue to grow exponentially over the next couple of years," said Appel. "It is also evident that any industry efforts to date have failed to curtail this growth, and music file sharing will be very difficult, if not impossible, to eliminate."

ChaosMusic believes the use of FreeTracks will serve as a benchmark for industry cooperation with the proposed structure likely to further develop through its implementation and trial.



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