Napster’s Barry Asks Congress for Online Music Licenses

Napster Chief Executive Officer Hank Barry Tuesday stood before the Senate
Committee on the Judiciary United State Senate in Washington, D.C. to ask
Congress to institute a license that would work similar to those used for
years in radio to render music delivery over the Web.

Barry’s plea was the latest in a series of steps to resolve the conflict the
file-swapping firm has unwittingly triggered in the past two years. As
expected, Barry suggestion was for the committee to rule on creating a
system in which artists are compensated directly for music downloaded or
streamed from the Internet, comparable to the “writer’s share” of public
performance payments that are collected by ASCAP and BMI.

By way of comparison, the interim CEO of the embattled firm noted that the
Recording Industry Association of America (RIAA) has also been pushing for
compulsory licenses for streaming audio, eliminating “individual

Barry also expounded on his efforts to bring a solution to market, citing
the agreement with German media empire Bertelsmann to design a music
subscription service. In a subtle dig at major labels and publishers, he
noted that no other organization had approached Napster to co-develop such a
service. Ironically, Real Networks Monday outlined music subscription service strategy MusicNet, which included AOL-Time Warner
and EMI Group.

It was that very strategy, legitimized by a consenting record label, which led RIAA Chief Hillary Rosen to decry Napster and its fans for not seeking similar “legal” courses of accessing online music.

Interestingly, (and no doubt as a calculated method of persuasion), Barry also agreed with the RIAA, the
organization with which Napster has been at odds with almost since the first
of the 60 million Napster software users shared music.

Explaining that ownership is split per track by both who recorded the song
and who wrote it, Barry said that when Vivendi-Universal put some
compositions online the RIAA tabbed the Copryright Office for a compulsory
license, after which he quoted the RIAA: the license would “avoid the need
for individual negotiations on a scale that is unprecedented in the industry
and thus facilitate the launch” of those new services …

Using the recording organization’s argument as precedent (and the fact that
Congress itself has upheld compulsory licenses), the executive extended it
to sound recordings, under which, Barry said, tracks on Napster fall, as
well as those heard on radio, cable television and satellite television.

Rose Mary Wenstrup, an associate in the technology transaction group at Jones, Day, Reavis and Pogue in Washington, D.C., told Tuesday that the notion of the compulsory license, especially as it pertains to music, is not a new idea. She also said it is by no means a cure-all.

“I don’t know if that would be a panacea,” Wenstrup said. “Compulsory licensing will be met with resistance by the music industry.”

Going to Congress is an important step for Napster, which is still fighting
the RIAA and the Big 5 record companies. Still, it is no secret that the
very record companies who have singled out the company for copyright
infringement also oppose compulsory licenses determined by Congress; they
don’t want the government telling them how to run their business (who

Accordingly, Senator Judiciary Committee Chairman Orrin Hatch (R-Utah) and Rep. Rick
Boucher (D-Va.) have made no attempt to conceal their aggravation toward the
music industry, accusing those parties of not offering a Napster alternative
for the several million music fans. Specifically, the men have noted that
the industry is loath to sell anything but complete albums online.

Barry’s testimony Tuesday on behalf of Napster would seem to be viewed
favorably by Congress, assuming it concurs with the company’s occasionally
retooled take on music dispensation over the Web.

Barry closed with the following: “Finally, the Napster community says loudly
and clearly that it wants artists and songwriters to be paid. I think that
the license you create should include a direct Internet rights payment to
artists. There is certainly precedent for this in the so-called ‘writer’s
share’ of public performance (radio and television) payments that are
collected by ASCAP and BMI” in which portions of the payments go to the

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