Online music interests converge at Senate hearing

By Margret Johnston, InfoWorld |  Business

IN the on-going squabble over Napster's popular Internet music file-sharing system, the U.S. Senate Judiciary Committee played the role of referee again Tuesday, hearing the concerns of a host of interested parties, including technology companies, record labels, and musicians.

The hearing attracted a huge crowd, including many young people, who filled up the standing room at the back of the committee's hearing room. The recording artists Don Henley, representing the Recording Artists Coalition, Alanis Morissette and Chuck D were among the witnesses testifying. Shawn Fanning, who founded Napster, also was present.

Questions posed by committee members revealed mild frustration over Napster's current inability to fully protect copyrighted material, despite a court order that it do so, and they questioned the time it is taking the music industry to offer a legitimate subscription service with a broad catalog of music that will meet consumer demand.

But in general, committee members seemed willing to continue in their oversight capacity and allow the various parties to try to resolve their differences in court and elsewhere rather than step in with proposed legislation.

The senators also seemed gratified that on the eve of the hearing some of the pressure they have put on the recording industry to come up with a digital music system with copyright protections in place apparently helped motivate three of them -- Bertelsmann, EMI Group, and AOL Time Warner (AOL) -- to announce a deal Monday with RealNetworks to develop a platform for online music subscription services.

Richard Parsons, co-chief operating officer of AOL, told the committee that MusicNet, as the effort is called, "ushers in the era of secure, convenient, interactive mass music distribution that consumers demand." Music by artists signed to record for Bertelsmann, EMI, and Time Warner will be licensed to MusicNet, and AOL in turn will distribute it, Parsons told the committee.

The service will start with three of the five major record labels, but its objective is to get the music catalogs of all five into its ranks -- and possibly Napster, too -- so that it will have the broadest possible online music offering. Deals will be made with the smaller independent companies as well, Parsons said. But when asked when the service will be available, he admitted software is still being tested to find an appropriate digital rights management system to make the service work.

"AOL is looking to market the service in late summer or early fall," Parsons said.

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