Napster, songwriters and publishers agree settlement terms

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.