The RIAA explained that, under the agreement, it and all its member labels and their licensees, including the new on-line subscription services “Pressplay” and “Musicnet,” will immediately have access to every musical work to be licensed by the Harry Fox Agency. This agency is the largest in the industry for licensing reproductions and distributions of musical works.
The agreement has been reached in advance of a final deal on royalties although the RIAA will pay Harry Fox an advance of $1m (£680 000) towards the unascertained royalties.
A certain amount of uncertainty still surrounds the agreement, however. Jupiter Research analyst Aram Sinnreich said;
“It’s not even really a deal; it’s $1 million to forestall litigation until after the (subscription services) launch…there’s a lot of unanswered questions about what role the publishers will play in the digital music world.”
Analysts have noted that a similar deal struck with Napster last month may be a source of tension since Napster agreed to pay the significantly larger sum of $10 million. In addition, the extent of consumer appetite for paid subscription services remains in doubt.