Napster, Publishers Reach Settlement On Royalties
The National Music Publishers' Association (NMPA) and the Songwriters' Guild of America have signed a preliminary agreement with Napster that effectively ends their class-action lawsuit against the fiThe National Music Publishers' Association (NMPA) and the Songwriters' Guild of America have signed a preliminary agreement with Napster that effectively ends their class-action lawsuit against the file-sharing service, Billboard Bulletin reports. The move also paves the way toward a similar accord between Napster and the Recording Industry Association of America (RIAA).
Under terms of the multi-year settlement, which will be monitored by the NMPA's licensing arm, the Harry Fox Agency, Napster will pay $26 million for past unauthorized uses of published music, and an additional $10 million as an advance toward future royalties generated by permanently downloaded content on Napster's planned subscription business model. Those royalties -- a rate for which has yet to be determined -- will be distributed in accordance with the Audio Home Recording Act, which allocates 30% to music publishers and 70% to the record industry.
Ed Murphy, president/CEO of the NMPA, says this system will "probably double" the royalty rate of 7.5 cents per song that is currently paid to songwriters in the offline business model. "We think this is a landmark decision," he says.
The settlement must be approved by U.S. District Judge Marilyn Hall Patel, who is overseeing the case, as well as NMPA member companies.
The RIAA issued no comment on the agreement. Napster president/CEO Konrad Hilbers says, "They are not backing off, but [RIAA president/CEO] Hilary Rosen has confirmed that she wants the case settled."