Mp3.com Sets Up Licensing Program

Unsigned acts whose songs are posted on MP3.com now have the opportunity to match their content with potential users looking to license music for traditional or nontraditional entertainment, advertising, and other multimedia productions.

The soft launch of the new music-licensing program was Jan. 31, with the first year's registration fee waived for all digital artists who register at least three songs for licensing by March 1 at mp3.com/licensing, according to Michael Bayer, MP3.com director of music licensing. After the initial free period, the annual registration fee is $25.

Independent artists and composers have the option to maintain complete control over the rights to their music, handling all licensing arrangements for the initial synchronization and master recording fees and subsequent performance right organization (PRO) royalty collection and administration themselves. Or, acts can choose to have these services performed by enableyourmusic (EYM), MP3.com's exclusive licensing services provider, headed by Steve Love, a 30-year music publishing veteran. His background includes being VP of worldwide music for All American Communications, administering music publishing activities for the Records Group (formerly Scotti Brothers Records), and, just prior to launching EYM, holding a VP post at Pearson Television Music, the largest independent global TV producer.

There is a basic 40% transaction fee/commission for any deal that EYM puts together, and EYM will handle the entire master use and synchronization administration. According to Love, this is a "very competitive fee" that includes negotiating the best rate with the potential buyer and preparing the required licenses to fulfill the agreement.

Separately, an artist or composer can use EYM's royalty administration services for what Love calls a "competitive 25% commission" on quarterly royalty payments. This includes Copyright Office registration, affiliation with the PRO of choice, and tracking and collecting performance royalties quarterly from that PRO. He notes that ASCAP, BMI, or SESAC will collect royalties from territories outside the U.S., but EYM will register each work with the foreign PROs.

Using the MP3.com search engine, prospective music users can comb through the largest collection of unaffiliated music on the Internet, with nearly 110,000 artists and bands currently posting more than 800,000 songs, Bayer notes. The engine allows any user to narrow results by keying in a list of desired song attributes. These include such simple characteristics as tempo, genre, and mood, as well as more complex functions, such as searching for bands that sound like other well-known bands.

Using data compiled by MP3.com, EYM is able to offer what Love calls "music-based marketing"—advanced criteria searches to provide songs that are targeted to specific areas or regions in the world or that appeal to different demographic groups. For example, if a TV show has been receiving poor ratings in Seattle and the Northwest, EYM can provide music that is popular among listeners in that region. Also, if music is needed for a Web site targeted to an 18- to 24-year-old age group, EYM can suggest songs found to be popular among that demographic.

The idea for the new licensing program came to Love while he was at Pearson and was looking for some cutting-edge music for Francis Ford Coppola's "First Wave" sci-fi series, now going into its second year on the Sci-Fi Channel. "I thought, 'Why not use the great talent from MP3.com's site?' " he recalls. He got an exclusive deal with MP3 to use any of the artists whose songs were posted on the Internet site, and the successful results led to more discussions.

"It was the first time this had been done," he says, "and it opened up the idea as a wonderful opportunity to take the music of these developing artists and bands and monetize this talent."

Recognizing that the majority of these independent musicians didn't have any understanding of the licensing arrangements or the royalty process, Love saw the value of providing these administration services. "We and MP3 jointly decided that there was a real potential business here, and now it's under way."

"By bringing artists together with the very people who make licensing decisions in film, TV, and advertising, we intend to create an invaluable tool for both musicians and music supervisors," Bayer says. "We're confident that our 'search, sample, and listen' process will be a quick and cost-effective alternative to traditional licensing methods."

In early March, MP3.com and EYM plan to open up the roster of registered songs to prospective users. "We'll be using a multi-pronged strategic effort to reach as much of the user community as possible," Love says. "We both have extensive lists of industry contacts, as well as links to below-the-radar sources, such as corporate and multimedia prospects."

Commenting on the new licensing program, Ed Murphy, president of the National Music Publishers Assn., says, "As a referral system for unsigned artists and bands, it's a good concept, and we encourage [artists] to look closely at the fees and what services will be provided. We're definitely in sync for opportunities like this for developing artists, and we'll be interested to see how well [MP3.com's music-licensing program] performs."

"With my background in music publishing, I've got nothing but respect for artists and songwriters, and we're dedicated to making the program totally artist-centric," Love says. "With MP3.com as the largest global integrator of independent music, over time we hope to become the largest licenser and administrator [of this music] in the world."