Press Release
| Music Publishers and MP3.com Reach Landmark Agreement. |
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Agreement Intended to Cover in Excess of One Million Songs Licensed Into the My.MP3.com Service The National Music Publishers' Association, Inc. (NMPA), its licensing subsidiary, The Harry Fox Agency, Inc (HFA), and MP3.com, Inc. (Nasdaq: MPPP) the Internet's premier Music Service Provider (MSP) announced their agreement today on a licensing arrangement that — if approved by individual HFA music publisher principals — will permit the use of over one million musical compositions on MP3.com's popular My.MP3.com service. The My.MP3.com service allows consumers to listen to music from CDs that they already own or which they purchase from MP3.com's retail partners. Concurrent with the announcement of the preliminary agreement, the music publisher plaintiffs in the copyright infringement action filed against MP3.com on March 14, 2000 (MPL Communications, Inc. and Peer International Corporation) announced that terms for the settlement of the litigation had also been reached with MP3.com. The final settlement of the case, currently pending before the United States District Court for the Southern District of New York, is conditioned upon the finalization of the licensing arrangement. That process requires ratification of the preliminary arrangement by individual HFA music publisher-principals. The proposed, 3-year licensing arrangement provides that MP3.com will pay up to thirty million dollars ($30,000,000) to HFA for the benefit of up to 25,000 music publishers and their songwriter partners as part of two equal funds. One fund will be used to pay HFA publisher-principals for past uses of music on the My.MP3.com service. The other will provide advance payments toward royalties earned under the prospective license. The number of potential songs licensed to MP3.com by the music publishers could exceed one million. The terms of the prospective license calls for a payment of one quarter cent each time a song is streamed on demand to a customer from his or her My.MP3.com locker along with a one-time fee per track added to the My.MP3.com service. "The Internet has certainly posed many difficult music publishing issues and this agreement with the NMPA and Harry Fox is a giant step for all consumers who want to simply be able to listen to music they already own legally," said Robin Richards, president and chief negotiator for www.mp3.com. "We believe the digital music space, through this agreement, has been thrust forward by the music publishers. All concerned should be tipping their hat to the Harry Fox Agency for stimulating and unlocking enormous value for artists, consumers, songwriters and publishers. Today the American public won." "We believe that our negotiations with MP3.com have yielded a landmark proposal that NMPA can refer to the music publishing and songwriting community with confidence and enthusiasm," stated Edward P. Murphy, President and CEO, NMPA. "This is a triple win -for music creators, Internet music service providers, and consumers. The American music publishing community has long viewed the Internet as presenting an enormous opportunity for growth, provided that creators and copyright holders are fairly compensated. We can now look forward to a productive and mutually beneficial relationship with MP3.com and similar services that respect the principles of copyright protection. We are proud to take the first landmark step to assist in stabilizing music access on the Internet with MP3.com, the largest and most innovative of music service providers." About the National Music Publishers' Association The National Music Publishers' Association, Inc., founded in 1917, works to protect and advance the interests of the music publishing industry. With over 700 members, NMPA represents the most important and influential music publishing firms throughout the United States. The Harry Fox Agency, Inc., the licensing subsidiary of NMPA, provides an information source, clearing house and monitoring service for licensing musical copyrights, and acts as licensing agent for more than 25,000 music publisher principals, who in turn represent the interests of more than 150,000 songwriters. About MP3.com MP3.com, Inc. has created what it believes is a unique and robust technology infrastructure for the storage, management, promotion and delivery of digital music. As the Internet's premier Music Service Provider (MSP), the company is dedicated to providing consumers with anytime, anywhere access to their music using any web-enabled device. The company's web site hosts what MP3.com believes is the largest collection of digital music available on the Internet, with more than 600,000 songs and audio files posted from over 100,000 digital artists and record labels. Dedicated to growing the digital music space, the company's products and services include on-demand Subscription Music Channels, an innovative Retail Music Program, a Syndicated Radio Division and others. Additionally, through the company's MSP initiative, MP3.com is partnering with a variety of forward-looking technology companies to expand its digital music strategy. MP3.com's common stock is traded on the Nasdaq National Market under the ticker symbol MPPP. The company is based in San Diego, California. For more information on MP3.com, visit www.mp3.com. # # # Statements in this press release that are not strictly historical are forward-looking statements within the meaning of section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements include references to activities expected to occur in connection with MP3.com's settlement and license arrangement with the National Music Publishers' Association and it's licensing subsidiary The Harry Fox Agency, Inc. These statements involve a high degree of risk and uncertainty, are only predictions, and actual events or results may differ materially from those projected in such forward-looking statements. Factors that could cause or contribute to differences include risks related to: implementation of MP3.com's license arrangement with the National Music Publishers' Association and it's licensing subsidiary The Harry Fox Agency, Inc; MP3.com's current litigation proceedings, including without limitation the inability to reach settlement with all parties to such litigation proceedings; MP3.com's new and uncertain business model; acceptance of MP3.com's products and services; MP3.com's limited operating history, and MP3.com's rapid growth, as well as other risks detailed from time-to-time in MP3.com's reports to the Securities and Exchange Commission, including its report on Form 10-K for the year ended December 31, 1999 and its subsequent reports on Form 10-Q. |
