Under the deal, Listen.com said it will have access to every musical work authorized by the Harry Fox Agency, a subsidiary of the National Music Publishers' Association (NMPA) that represents most songs published in the United States. Harry Fox will issue licenses to Listen.com that allow the music service provider to reproduce and distribute music through its upcoming subscription service, dubbed Rhapsody.
Rhapsody, set to launch Dec. 3, will be licensed to Listen.com's distribution partners. The company has been striking deals from a host of independent labels, such as Monarch Records and Heyday Records, and will offer songs from artists such as 10,000 Maniacs, the Rembrandts and Duke Ellington.
The announcement comes as online music shifts from its free file-swapping days dominated by Napster to paid services under the auspices of the major record labels. Sony and Vivendi Universal's Pressplay and rival MusicNet--backed by RealNetworks, AOL Time Warner, Bertelsmann and EMI Group--are moving closer to launching their online subscription services.
Among other issues, these services have struggled to sign deals with a host of copyrights holders. Many different people can hold rights to make money from any given recorded song, including the artists, the songwriter, the publisher and the record label.
"One of the biggest stumbling blocks that the entire industry has faced with getting legitimate online music service is figuring out how to deal with publishing rights, which are incredibly fragmented," said Dave Williams, vice president of product management at Listen.com. The Listen.com deal shows "a new willingness by the industry to step forward in a meaningful way to allow legitimate online music distribution."
Listen.com said it would pay Harry Fox an advance of up to $500,000 toward the royalties.
The major labels have already reached an agreement with the NMPA and Harry Fox on licensing terms. Under that deal, Harry Fox will issue licenses for subscription services that offer on-demand streaming and limited downloads. The labels agreed to pay $1 million to publishers over two years and work out the details of a business deal later.
The publishers have also struck a deal with file-swapping service Napster, which agreed to pay $10 million as an advance on licensing fees, or ten times what all the labels together will pay up front.
The Listen.com deal "confirms that music publishers are prepared to meet the demand of Internet music services for licenses to launch subscription services immediately," Edward Murphy, chief executive of the NMPA, said in a statement. "We expect to see many similar deals with Internet services in the weeks and months to come."