MediaNet Responds To Music Publishers' Gauntlet Throwdown

Music publishers have lost their patience with digital music services they say have been stiffing them on royalties. On Wednesday, we reported that the National Music Publishers Association (NMPA) members sued MediaNet (formerly MusicNet), because, they say, MediaNet lacks a valid agreement with them for the streaming and downloading of song to which the NMPA members own the publishing rights.

Yesterday, MediaNet fired back by issuing the following statement (I received it a day late due to an email address mixup), saying that its agreements with the NMPA members are still good, and that the suit is a "transparent political move" intended to sway the Copyright Royalty Board, which is currently setting publishing royalty rates for subscription streams, interactive streams, downloads, ringtones, and CDs:

This complaint is completely without merit. In an ageof rampant piracy, MediaNet is one of the few companies, along withNapster and RealNetworks, that pays copyright holders and artists fortheir work. The suit is contrary to the core beliefs and businessmodel under which MediaNet (aka MusicNet) has operated since itsinception.

MediaNet and others were licensed by the NMPA to distribute musicalworks until a final publishing rate was established, and this remainsthe case. As the NMPA is aware, MediaNet, Napster and RealNetworksalong with several other companies are all currently in arbitration toset the publishing royalty rate. We are anxiously waiting for thisrate to be set so that payments to all appropriate parties can bemade.

NMPA's suit and PR push is a transparent political move during theCopyright Royalty Board hearings to establish an industry-widestandard. This is nonsense, and we look forward to the CRB reaching afinal conclusion on rate standards.

This could get ugly.