FOX TO PULL THE PLUG ON STREAMS?

The Harry Fox Agency has withdrawn its proposed license for interactive streaming from Music Net, which supplies music for Microsoft, MTV and Yahoo!, among others.

The mechanical rights agency charges that the digital trade group DiMA failed to propose a rate for the streams in the Copyright Royalty Board’s upcoming proceeding, which suggests they’re trying to get out of paying any royalties for the past five years.

Apparently that’s a no-no for the folks at Harry Fox Agency.

The failure to seal a licensing deal could conceivably lead to copyright infringement suits by publishers against digital services not covered by any license.

MusicNet was initially covered by an agreement reached in 2001 between HFA and the RIAA, which represented labels with ownership interests in services like MusicNet, whose owners included BMG Music, EMI Music and Warner Music Group. The online services agreed to pay royalties once rates were set through negotiations. Royalties would then be paid retroactive to the 2001 agreement

MusicNet, a B2B which secures licenses and supplies music for online streaming and downloads, was acquired by Baker Capital in April 2005. HFA then notified the company it was no longer covered by the previous RIAA pact and would have to agree on a new one.

A new deal was reportedly close to completion recently, but insiders suggested that DiMA would try to argue that no royalties should be paid for interactive streams. HFA says it will continue to negotiate with MusicNet for limited downloads, but not for streams.