MP3.COM SETTLEMENT TALKS: CLEARING THE TABLE?

Negotiations between maverick online music distributor MP3.com and the major label groups regarding possible music licensing agreements have come to a standstill.

Highly placed sources said the future of such a deal, which would restore major-label content to MP3.com's My.Mp3.com library, looks dim at this time.

With MP3.com already pulling the majors' content off its site to comply with judgment against it in the lawsuit filed by the Recording Industry Association of America, sources said there is no longer a compelling reason for the Big Five to cut a deal. MP3.com was found by a federal judge to be violating copyrights.

RIAA had been asking for a per-song licensing agreement with MP3.com before the trial. The MSP was unwilling to comply with the request before, but sources say they're much more disposed to do so now. However, with the RIAA's victory, the labels have accomplished their aims, and the deal issue is quickly falling off their radar.

The RIAA negotiating team still wants $100 million from MP3.com for past indiscretions before talking licensing deal points. MP3.com is reportedly willing to pay $100 million, but wants that sum to cover both past violations and future arrangements.

With diminishing interest, questioners are questioning whether MP3.com really needs to be in the My.MP3.com business with the majors—and if My.MP3.com is even central to the company's core business plan.

Two weeks ago, the online distributor reached a licensing agreement with BMI, one of the two major U.S. organizations that collect music royalty payments. The deal with BMI let MP3.com play BMI's 4.5 million compositions on its Web site (hitsdailydouble.com, 5/8).

The BMI deal helped give the company a substantial NASDAQ spike, as shares went up 3.31 to 13.69 after the announced deal.

At the close of NASDAQ on Wednesday (5/17), MP3.com stock closed at 11 ¹³/_16, down ⁵/_16.