MP3.com’s settlement with two of the five major record labels that brought forth copy-infringment suits last January bode well for its stock trading Friday. Shares for the online music provider shot up to 35 percent, or $6, to 23 1/4 in pre-opening trading.
Financial terms of the settlement have not been disclosed. However, Reuters reported that MP3 will pay
Warner and BMG between $75 million and $100 million to settle their claims.
The resolution permits MP3 to include songs from Time Warner’s Inc.’s Warner Music Group and BMG Entertainment in its database.
“The settlement agreement clearly affirms the right of copyright owners to be compensated for the use
of their works on the Internet,” said Paul Vidich, Warner Music Group executive vice president, strategic planning and business development
Further, WMG announced that it has entered into a North American license with MP3.com for use of WMG-controlled recordings on
My.MP3.com’s Beam-It and Instant Listening software services. These
services allows users to insert copies of CDs they already own into their My.Mp3.com Music Manager.
The partnership puts MP3 in a better posistion to demonstrate how its technical infrastructure can enhance the digital music arena, said Robin Richards, MP3.com president and chief negotiator.
“The license agreement allows us to stabilize
the digital music space from a consumer-marketing, royalty-tracking and
copyright-protection perspective,” Richards said. “We look forward to collaborating with WMG
over the coming years on many new and unique promotions.”
WMG will share the monies received in connection with the settlement and license agreement with its
artists in accordance with the terms of their agreements.
Additionally, BMG Entertainment has granted MP3.com a
license to use its catalogue of music.
The settlement works well for both parties, stated Kevin Conroy, chief marketing officer and president,
new technology, BMG Entertainment.
“BMG vigorously enforces its copyrights. At the same time, we believe the
best enforcement is the creation of legitimate alternatives for consumers,” he said. “As
we build our global digital distribution platform, we are interested in
working with responsible Internet companies that help us create new avenues
for music fans to access their favorite music in a way that protects our
artists’ rights.”
Other labels in the suit are Sony Music Entertainment, Seagram Co.’s Universal Music Group and EMI Group Plc. The suit was filed last January as part of an anit-piracy crusade launched against MP3.
The BMG settlement comes only 24 hours on
the heels of a BMG Entertainment deal with MusicBank, an online music service
that will provide consumers on-demand streaming access to BMG’s entire music
catalog. A service patterned after My.MP3.com, MusicBank will allow customers
to store, manage and listen to their entire CD collections via the Web
without having to encode or upload the content.
MusicBank’s system of verifying the ownership of BMG’s CDs, either through
retailer verification of purchase or through physical possession, will allow
consumers secure access to their content through a web-based interface
scheduled to launch this fall.
