Senate Panel Hears Music Debate

WASHINGTON (07/11/2000) - The U.S. Senate Judiciary Committee on Tuesday delved into the controversy over downloadable music available on the Internet in a hearing that featured recording artists and Web site representatives.

The senators expressed concern about protecting copyrights of recording artists, but at the same time seemed willing leave the issue, at least for now, to be settled in the marketplace and in the courts rather than by writing new legislation.

The committee heard from eight witnesses, including Lars Ulrich, member and co-founder of the rock group Metallica; Michael Robertson, chairman and chief executive officer (CEO) of MP3.com Inc.; and Hank Barry, CEO of Napster Inc.

The witnesses laid out the various arguments for and against the way music files are currently offered for downloading and sharing over the Internet.

The hearing included live demonstrations of MP3.com and Napster.

Ulrich asked the committee for legislation to combat the downloading of copyrighted music. "There's only one way to assemble a music collection (that is) the equivalent of a Napster user's: theft," Ulrich said.

"I think legislation should be part of this -- I think we're dreaming if we think we can work this out between us," Ulrich said. He added that his band has tried a dialogue with Napster, but he doesn't feel the situation can be worked out without the Senate committee's involvement. Metallica in April ended up suing Napster. [See "Metallica Sues Napster, Universities," April 14.]MP3.com's Robertson said he believed that it was necessary for some legislation to clarify the definition of fair use of music that consumers already own. For example, under current interpretation of fair use laws, he said, users can pass along copies of music to friends, as long as they are not sold, he said.

Robertson said that MP3.com's Beam-it software gives consumers the convenience of downloading music onto a variety of devices -- and stressed that the service is for music that consumers have already bought.

Beam-it matches music CDs that users insert into their PCs with CDs stored in MP3.com's own library, he explained. The software asks users if they own the CDs. If users verify they own the CDs in question, and the CDs match those in MP3.com's library, users then may log into their My.MP3.com account from any PC to listen to the CDs. MP3.com has already reached settlement agreements over copyright-infringement suits filed by several music industry giants, including Warner Brothers Music Group Inc. and BMG Entertainment Inc. (BMG), which allows MP3.com to offer music from the companies via the Beam-it software.

Most of the questions from the senators were aimed at Robertson and Barry, with Barry being questioned about the Napster business model -- specifically about how Napster plans to be profitable in light of a recent US$15 million venture capital round of funding.

Barry said the company expects that it can make money by offering a way for users to easily share music files by referring to the list of songs that Napster has on its file server.

"I love the innovation that is coming in this digital world," said Patrick Leahy, a Democrat from Vermont. "But we are not going to have artists (offering works of art) unless there is some gain to them."

(More details to come.)

MP3.com, based in San Diego, California, can be reached at +1-858-623-7000 or at http://www.MP3.com/. Napster, based in San Mateo, California, can be reached at +1-650-570-5382 or via the Web at http://www.napster.com/.

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