Pubs To Web: 'let's Talk'

The head of the National Music Publishers' Assn. told House lawmakers March 8 that the group is now open to music license changes and has entered discussions with labels and online music services about a blanket license for subscription services.

"We've come a long way in the last year," said David Israelite, the new president/CEO of the NMPA. "We're open to new ideas, including the concept of blanket licensing—starting with subscription services first."

He added, "I am pleased to report that NMPA has been engaged in discussions with the Digital Media Assn. and the Recording Industry Assn. of America regarding the licensing of DPDs [digital phonorecord downloads] by online subscription services."

In addition, Israelite has moved the office to Washington, D.C., and has hired new staffers.

The NMPA's new stance could put an end to five years of acrimony between online music service companies and music publishers over licensing.

It could also signal an end of constant complaints to Congress by online music companies and their trade group, DiMA, regarding the NMPA's past interpretation of section 115 of the Copyright Act, which deals with the mechanical compulsory license for reproductions of songs.

Online companies have said that music publishers interpret the section as requiring more than one payment per distribution—an additional fee for making an "ephemeral" copy of a work to be stored on the computer server, for example. DiMA executive director Jonathan Potter calls it "double dipping."

The U.S. Copyright Office has underscored those complaints with several position papers calling for modifications of section 115. Register of copyrights Marybeth Peters told the House Subcommittee on Courts, the Internet and Intellectual Property last year that she supported the "attempt to simplify the requirements for obtaining the compulsory license and . . . create a seamless licensing regime under the law."

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."

Potter told lawmakers he supports a royalty rate based on a percentage of company revenue, rather than a per-track rate. He also wants a simplified arbitration process.

Before being tapped by NMPA, Israelite, a Republican, was deputy chief of staff/counselor to U.S. Attorney General John Ashcroft. Last year, he was also named chairman of the Department of Justice's Task Force on Intellectual Property, a position D. Kyle Sampson will now fill (see story, page 7).

"We're willing to consider everything between the goal posts is possible," Israelite told reporters after the hearing. "Anything between pure radio and pure sale."

The hearing before the House subcommittee was a follow-up to one in March 2004. The panel chairman, Rep. Lamar Smith, R-Texas, says there would be subsequent oversight hearings on the issue.