Music Publishers Leave Dark Age
When the music industry completely missed the boat on competing with "free" during the first Napster Era, music labels were fingered as slow-moving dinosaurs incapable of seeing the digital music light.
Sure, there was some truth to the generalization, but there were also a lot of folks at the labels doing their best to move quickly and strike deals with legitimate players like Real Networks, Listen.com, AOL, Yahoo!, etc.
Yet, these agile tech companies also had to deal with a true Brontosaurus Rex: Publishers -- who represent the songwriters and their music publishers in the U.S. Just like the music labels (and to a lesser extent, the artist), publishers get a cut on every music sale, performance or broadcast....
So, while legitimate online music firms were doing their best to fight off P2P competition the publishers (namely the Harry Fox Agency) threw wrenches in the process by operating in a world that required companies to sift through card catalogs to find the right publisher to compensate among 40,000. They also insisted that streaming music providers pay both for the stream of a track and an "ephemeral" copy of the music on a local server. Publishers also insisted on negotiating on a case by case basis, while online music companies craved the certainty and simplicity of a blanket license.
Is there a happy ending? We'll see, but light has burst through the clouds in the form of David Israelite. Mr. Israelite is the new president of the National Music Publishers Association and he told Congress last week that his organization is now suddenly open-minded. He says, "We've come a long way in the last year. We're open to new ideas, including the concept of blanket licensing..."
How big of a deal is this?
Record-company response to Israelite's call for change was positive. Hearing witness Larry Kenswil, president of eLabs, Universal Music Group's new-media and technology division, told lawmakers that the changes at the NMPA were so significant that "if we got together and worked day and night, we could probably come back to you in a few weeks and we'd have worked something out."
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