Sony/ATV Stops Future Licensing of Digital Services

By Susan Butler, N.Y.

Sony/ATV Music Publishing has instructed the Harry Fox Agency today to stop all future licensing of any of the publisher's repertoire for streaming or limited downloads, Billboard.biz has learned.

The instruction is expected to impact services like RealNetwork's Rhapsody, Napster and MediaNet (formerly known as MusicNet). It also raises the question of whether a service that offers a stream or a limited download of any of the publisher's songs released on records after today would be intentionally infringing the publisher's copyrights.

The move is in response to the Digital Media Assn.'s motion filed yesterday with the Copyright Royalty Board (CRB). In the motion, DiMA argues that an interactive stream is not a digital phonorecord delivery (DPD) and, therefore, should not have to be licensed for reproduction. Instead, an interactive stream should only trigger a performance license from ASCAP, BMI or SESAC.

The trade group asked the CRB to request the Copyright Office to issue a decision whether or not an interactive stream is a DPD. If a stream is not a DPD, then digital services would not be required to obtain a section 115 reproduction license (i.e., a DPD license) under copyright law.

A source close to Sony/ATV says that the publisher sees DiMA's move as "underhanded." As previously reported, many digital services have entered agreements with HFA since 2001 promising to pay for the right to reproduce compositions transmitted via interactive streams and limited downloads (offered by subscription services) when rates were set -- and to pay them retroactively.

Other major publishers are also expected to stop future licensing of the services.

DiMA member companies include American Online, Apple Computer, MediaNet,
Napster, RealNetworks and Yahoo!.