Follows HFA's objection to proposed settlement.

The Harry Fox Agency has entered into a mechanical licensing deal for record clubs with BMG Columbia House, the largest U.S. direct-to-customer distributor of music and movies. The deal follows HFA's objection last year to a proposed class-action settlement between the record club and a class of publishers that claimed they had never licensed rights to the clubs.

Under the HFA arrangement —which is separate from the class-action suit—music publishers affiliated with HFA will have the option beginning June 5 of making their catalogs available in the future to BMG Columbia House for licensing at 75% of the mechanical statutory rate. The full rate is currently 9.1 cents for compositions five minutes or less in duration or 1.75 cents per minute for compositions more than five minutes, payable for every CD or cassette manufactured and distributed in the United States. The 75% rate is 6.825 cents and 1.3125 cent, respectively.

As with HFA's standard mechanical license terms, the record club must report royalties to HFA 45 days after the close of a calendar quarter. This agreement will remain in effect for four years, with automatic annual extensions if the parties are still satisfied with the arrangement. BMG Columbia House will use HFA's online licensing tools for their licensing activity.

"We are very pleased to have reached this arrangement with BMG Columbia House, which will ensure that compositions administered by the Harry Fox Agency will be formally licensed at an agreed-upon rate," said Gary Churgin, HFA president/CEO. "This arrangement upholds the rights of our music publishers, while acknowledging the economics of the record club model."

"The Harry Fox Agency has always been a great ally and working partner. Our new agreement builds on that relationship," said Clif Knight, executive VP, business and legal affairs for BMG Columbia House. "We appreciate the efforts of senior management at HFA to conclude this arrangement."

The class-action suit, known as the Ory case, is still pending. For HFA publishers that take advantage of these license terms, they will not be part of that portion of the class-action settlement that may pertain to future licenses. HFA is not a party to that suit.