Mp3.com Settles Suits, Signs Licenses

Online music company MP3.com has settled its legal differences with BMG Entertainment and Warner Music Group, and has signed licensing pacts with both companies to make their content available on MP3.com's MyMP3.com storage service.

BMG and Warner were part of a lawsuit filed by the Recording Industry Association Of America on behalf of the major record labels, who charged that the MyMP3.com service -- which creates a database of music tracks from purchased CDs and stores them in individual My.MP3 accounts -- had illegally amassed a database of more than 45,000 CDs.

MP3.com will pay approximately $100 million to settle the suits. The damages will be distributed among the plaintiffs.

"This is an important moment for recording artists and copyright owners," Paul Vidich, Warner Music Group executive VP, said in a statement. "This settlement ends an unfortunate period in our history with MP3.com.

"We are pleased that, having entered into a license agreement, MP3.com can now move forward and offer Warner Music Group's recordings on its popular MyMP3.com system. The settlement agreement clearly affirms the right of copyright owners to be compensated for the use of their works on the Internet."

Speaking about the settlement with BMG, MP3.com president and chief negotiator Robin Richards said, "Exercising their vision and Internet understanding, BMG is on the leading edge of this inevitable convergence, and by so doing, has put the digital music space one step closer to stability."

"That will be an amazingly good deal for MP3.com," says Forrester Research music analyst Eric Scheirer of the settlement. "And it sets the stage for them to be the flag-bearers for distributing major-label content."