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MRI compiles lists of songs from subscriber services, digital lockers and Webcasters and bills companies for performance-rights royalties. After the upcoming arbitration hearing, which will determine the cost of blanket licenses, MRI could also collect that data for Webcast royalties.

MUSIC REPORTS INC. TRIES TO UNDERCUT RIAA

Will Upstart Agency Move In On The Webcasting Collections Racket?
When we hear "royalty collection," we think about our Franklin Mint Princess Diana memorabilia. When we hear "Webcast royalty collection," we think about how comfortable that couch would be to sleep on.

As part of the 1998 Digital Millennium Copyright Act, Webcasters are required to pay royalties to labels, which are then supposed to split the money 50-50 with artists. This means money is changing hands—and that interests us.

The Recording Industry Association of America has had a virtual lock on collecting and distributing digital-performance royalties for the past few years. The music-biz advocacy group and litigation cheerleader announced Friday it had dubbed its collection group SoundExchange, because its original name, The RIAA Collective, was "too Communistic."

The group will act as the labels' sole negotiator with Webcasters in granting blanket licenses. The RIAA has faced criticism from Webcasters and independent artists, who claim the organization faces an inherent conflict of interest that could prevent it from reliably representing artists' interests. SoundExchange was scheduled to launch Wed. (10/11), but has been temporarily postponed, possibly in observance of Veteran's Day.

Or maybe they're gearing up for competition from the privately held Music Reports Inc., which is aiming to enter the Webcast royalty bonanza. The clearinghouse already collects and distributes money to copyright owners, ASCAP, BMI and the Harry Fox Agency. Its subsidiary company, Copyright Clearinghouse Inc.—which no one is likely to consider even vaguely pinko—negotiates music licenses for Web sites and broadcasters.

MRI compiles lists of songs from subscriber services, digital lockers and Webcasters and bills companies for performance-rights royalties. After the upcoming arbitration hearing, which will determine the cost of blanket licenses, MRI could also collect that data for Webcast royalties.

Both MRI and SoundExchange could operate simultaneously; MRI could even collect dough and send it to SoundExchange. Or labels and artists could get money straight from the company. That couch is starting to look appealing again.

The U.S. Copyright Office has been given the awesome responsibility of approving agents wishing to get into the Webcast royalty business. Let's hope CNN runs the approval process gavel-to-gavel.

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