Music Publishers, Recording Companies in Net Licensing Accord

The National Music Publishers’ Assn. Inc. and the Recording Industry Assn. of America have come to an agreement on the licensing of songs distributed over the Internet.

The new procedures will “substantially” reduce the time and effort needed to clear music publishing rights for the delivery of music via the Internet, the agencies said. The agreement is between RIAA member record companies and the Harry Fox Agency Inc., a subsidiary of NMPA.

The accord comes as Napster Inc.’s music-sharing Web site and similar sites have gained popularity during the last year. In addition, record companies such as Bertelsmann’s BMG and Time Warner Inc.’s Warner Music Group are developing their own technology for selling music over the Internet to compete with closely held Napster.

The agreement is in effect until the formal adoption of rules concerning so-called Digital Phonorecord Delivery licenses by the librarian of Congress, or until Sept. 30 of next year. Napster is currently seeking to lift a preliminary injunction that found the company’s software eases unprecedented illegal copying of music. The case is looked upon as a harbinger for music companies, book publishers and film studios, which must contend with technologies that could permit piracy of their products.

Music companies such as Time Warner and Sony Corp. could miss $3.1 billion in potential profits by 2005 through online sharing, according to a Forrester Research Inc. report.