The agreement includes terms under which the songwriters and
music publishers will license their music to Napster's new
subscription-based service.
The announcement of the proposed settlement was made jointly by
Edward P. Murphy, president and CEO of the National Music
Publishers' Association, Gary L. Churgin, president and CEO of The
Harry Fox Agency, George David Weiss, president of The Songwriters'
Guild of America, and Napster president and CEO 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 those bringing the class action, and by
the Board of Directors of the National Music Publishers'
Association (NMPA).
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, unauthorised 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 music
publishers’ royalties in a one-third to two-thirds ratio with
copyright owners of sound recordings.
The Harry Fox Agency, 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.
Napster intends to launch its new membership-based file sharing
service later this year.
Napster’s service is currently closed as a result of the various
legal actions against it which effectively forced it to change its
model to a subscription-based service. Its action against the major
record labels, which hold the rights to most of the recordings of
the published songs, are ongoing. Napster says that settlement
talks in that action are continuing. Until it can secure a licence
for the recording rights in addition to the publishing rights, its
subscription service cannot legally operate.
