"We could get all the labels in the world on the service but we still couldn't do anything without the publishing rights."
——Hank Barry, Napster CEO

BARRY SEES MUSIC PUBLISHERS AS KEY TO ONLINE SERVICES

Napster CEO "Thinking About Publishing," Could Be Talking About Memoirs, Dissertation
Since the battle for online music won’t really be finished until the music publishers decide what they want out of the deal, maybe it’s not such a bad idea that Hank Barry, CEO of the beleaguered netco Napster, is "spending a lot of time thinking about publishing."

Said Barry in a recent interview with Reuters, "We could get all the labels in the world on the service but we still couldn't do anything without the publishing rights."

Barry echoed what many big label executives are grappling with as a growing dispute over publishers' royalty rates threatens to undermine recently announced plans to launch commercial services—such as the RealNetworks/Warner Music/EMI/Bertie joint venture MusicNet or Sony/Vivendi Universal’s Duet subscription service—as alternatives to Napster.

Meanwhile, since a February legal smackdown (hitsdailydouble.com, 2/12), Napster has seen its usage drop to 150,000 downloads a day from 250,000.

But Napster still plans to launch the pay version of its site by this summer—which, incidentally, officially begins in about 22 days. To bolster the new pay version of Napster, Barry admitted to Reuters that he had been talking with many parties, including the big labels, technology companies (such as Microsoft, perhaps you’ve heard of them?) and the music publishers. But Barry claimed that subscription services could succeed even without big label content.

"Our internal research shows that a significant amount of users will pay for the new Napster service even without major label content," Barry said. "That makes music publishing really important. The new service is being built to enable all artists and songwriters to receive payments whether they're on a major label or not."

Industry insiders were curious to know just how Barry defined both "internal research" and "significant amount."

But even if the pay version of Napster doesn’t succeed, there is still the issue of MusicNet and Duet—two ventures Barry is also trying to work out a deal with—and whether those services will strike an acceptable deal with the music publishers.

Last week, the U.S. Copyright Office received comments from several parties and companies, including Napster, who sided with the National Music Publishers' Association on several fronts.

Both Napster the NMPA urged the Copyright Office to reject calls by record labels to initiate a rule making procedure on the issue. The publishers said the labels had called for a moratorium on payment of certain royalties to songwriters and music publishers for use of their works over the Internet.

"Before the labels launch those services," said NMPA president Edward Murphy, who took time out of providing the voice for a hilarious computer-generated talking donkey to give Reuters a quote, "they need to have our licenses and they could hold this process up from one to two years with the process they are requesting through the copyright office."

Which, to us at HITS, sounds like we’ll have plenty to write about in the coming months.

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