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DIGITAL MEDIA WIRE -- December 8, 2000
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o Copyright Office Says Radio Stations Must Pay For Streaming Online
o Songwriters And Music Publishers File Suit Against Universal Music
o Unsuccessful In Seeking A Buyer, Shuts Down
o Educational Quiz Site CraniaMania Raises $1.2 Million In Second Round
o Liquid Audio To Join Auction For Assets Of File-Sharing Exchange Scour
o EMI Sells Its Stake In Struggling
> Digital Media Wire Networking Event -- Los Angeles
o Briefly Noted: GlobalFun - CompuTel, Compression Science, Richard
Curtis, "Big Music Fights Back," "Streaming Media West"

o Copyright Office Says Radio Stations Must Pay For Streaming Online

Washington, D.C. -- The U.S. Copyright Office said on Friday that
traditional radio stations must pay additional royalties to copyright
holders when they stream music online. Radio stations already pay to
license the music they broadcast over the airwaves, but to this point have
not paid additional licensing fees for Internet simulcasting.
"Transmissions of a broadcast signal over a digital communications
network, such as the Internet, are not exempt from copyright liability,"
the Copyright Office said in its ruling. An arbitration panel will
determine the rates paid by Clear Channel Communications, Infinity
Broadcasting and other radio companies for streaming their stations'
signals on the Internet. The Recording Industry Association of America
(RIAA), whose members will gain millions of dollars as a result of the new
rule, responded in a statement saying, "We are gratified the U.S.
Copyright Office agreed with our position," said RIAA CEO Hilary Rosen.
"They reached the right conclusion as a matter of law and sensible policy.
This is an important right for artists and record companies. We look
forward to working with the broadcasters for a smooth transition into this
marketplace." Bloomberg News estimates that about 4,000 of almost 14,000
U.S. stations rebroadcast their signals over the Internet.

o Songwriters And Music Publishers File Suit Against Universal Music

New York -- A group of songwriters and music publishers has sued Universal
Music Group, charging that the record label failed to license songs used
in the on-demand streaming service on its website. The suit
claims the 25,000 songs on the service must be licensed before being
stored in the company's database. Plaintiffs to the suit include The
Songwriters' Guild of America, The Rogers & Hammerstein Organization and
Elvis Presley Music, who claim that the service is illegally
allowing users to stream songs like "Love Me Tender" and "My Favorite
Things" to their computers. The suit seeks $150,000 for each work
allegedly infringed upon. In a statement released by the National Music
Publishers Association (NMPA), which supports the lawsuit, the NMPA says
that Universal is guilty of the same unlicensed activities for which it
successfully sued The label won a $53.4 million "judgment"
against the downloadable music site for streaming unlicensed songs on its service. "In order for the Internet to thrive as an e-commerce
medium for the benefit of everyone, all copyright users must be treated
equally," said Edward P. Murphy, president of the NMPA. "None is above the
others in having some special authority to engage in unlicensed use of
copyrighted musical works." George David Weiss, president of the plaintiff
Songwriters' Guild of America added, "It is essential that the
contribution of the songwriter be respected and fairly rewarded. Industry
leaders should be setting a positive example by taking licenses and paying
for the music they use, not following the destructive example of the
Napsters of the world." Universal responded in a statement by saying that,
"The publishers are making a claim that is blatantly inconsistent with the
legal positions they have taken before. Moreover, Universal has followed
the applicable licensing procedures, including those agreed upon by the
Harry Fox Agency, to cover Universal's online activities."

o Unsuccessful In Seeking A Buyer, Shuts Down

San Francisco --, an online music label that targeted bands
without recording contracts, has shut down and fired all employees, Wired
News reported on Friday. In recent weeks, the company had been actively
looking to be acquired, and sought a buyer for its assets, which include
record label 1500 Records and San Francisco's Great American Music Hall.
"The deals we had on the table fell through," said CEO Ken
Wirt. "The one we thought was most certain -- from an old economy company
-- fell through after they did their financial projections for the next
year. A second deal fell through when investors in a new economy company
pulled their next round of funding." Employees at were given
an undisclosed severance package, the article said. Employees at 1500
Records were also fired on Friday, and the label said it will resume
normal operations after it begins to receive sales revenue from an
upcoming album's release. told Wired News that the Music Hall
will still operate under its current management.,1367,40561,00.html

o Educational Quiz Site CraniaMania Raises $1.2 Million In Second Round

Los Angeles -- CraniaMania, an educational quiz site for teenage students,
announced on Friday that it has raised $1.2 million in its second round of
financing. The Sapling Foundation led the round; former president of Time
Warner Cable Thayer Bigelow and other individual investors also
contributed. Los Angeles-based CraniaMania offers interactive quizzes on
high school subjects that aim to sharpen students' test-taking skills and
general knowledge. Competitors can form groups within their school and
challenge other schools online. The company has partnered with U.S. News &
World Report's Classroom Program, a supplementary curriculum for

o Liquid Audio To Join Auction For Assets Of File-Sharing Exchange Scour

Redwood City, Calif. -- Liquid Audio, a distributor of digital music,
announced that it has entered a bid in a Los Angeles court to acquire the
assets of bankrupt file-sharing exchange Scour. If it wins the auction,
Redwood City-based Liquid Audio said it will integrate Scour's
peer-to-peer technology into its distribution system, allowing online
retailers and music destinations to add file-sharing services to their
sites. The company's distribution system, which lets users pay to download
protected tracks, is utilized on sites like, Best Buy and
CDNow. Liquid Audio joins, MP3Board and CenterSpan
Communications in the auction for Scour's assets, which is part of the
Scour's Chapter 11 proceedings.

o EMI Sells Its Stake In Struggling

Reston, Va. --, an online retailer of custom CDs and
downloadable music, announced that record label EMI Recorded Music has
sold off all of its shares in the company to BCG Strategic Investors.
Terms of the transaction were not disclosed. Two EMI-affiliated board
members have resigned their posts in accordance with the sell-off. The
company also announced the adoption of a shareholder's rights plan, which
it said is "designed to assure stockholders fair value in the event of a
future unsolicited business combination or similar transaction involving
the company." New York-based, which licenses music from
labels so that its users can create customized CDs online, laid off 30
percent of its staff in September as part of a restructuring that would
reduce its burn rate to $10 - $12 million per year.

> Digital Media Wire Networking Event: Los Angeles

DC Area -- Digital Media Wire will host its next networking event on
Wednesday, December 13 in Los Angeles for subscribers and those interested
in the convergence of entertainment, technology and the Internet. Light
hors d'oeuvres will be served and there will be a cash bar. There is no
charge for the event and registration is not necessary.

Event Sponsor:
iHollywood Forum

Date: Wednesday, December 13, 2000
Time: 6:30 - 9:30
Location: The Sunset Trocadero Lounge
8280 Sunset Boulevard - West Hollywood, CA

For additional details:

o Briefly Noted:

(Gothenburg, Sweden) GlobalFun, a developer of interactive entertainment
content, announced on Friday that it has partnered with CompuTel, a
subsidiary of German publisher Springer Group, to develop games and other
interactive content for European Internet and wireless markets.
Sweden-based GlobalFun recently signed a deal with Fox to develop an
interactive game for the network's "World's Scariest Police Chases," and
is developing console games for the Fox series "Futurama." 

(Campbell, Calif.) MotionTV, a developer of video compression technology,
announced on Friday that it is changing its name to Compression Science.
"The new name better reflects what the company is all about," said CEO
Garrett Cecchini. "We are setting new standards for video compression for
the Internet in addition to a number of other applications including
video-on-demand, distance learning and corporate communications."

(New York) featured an interview on Friday with Richard Curtis.
Curtis owns a literary agency, Richard Curtis Associates, and is the
founder of e-reads, an online publishing company. E-reads initially plans
to offer e-book and print-on-demand versions of 1200 out-of-print titles
acquired from Curtis's author clients. Curtis said that the company will
eventually also sell new releases, making him both an agent and a
publisher. The interview addresses this dilemma as well as the's business plan.

(San Francisco) The Dec. 12 issue of Business 2.0 Magazine includes a
feature story ("Big Music Fights Back") on the efforts of each of the
music industry's major labels -- EMI Recorded Music, Sony Music
Entertainment, BMG Entertainment, Universal Music Group and Warner Music
Group -- to put its music online. Free alternatives such as Napster and
Gnutella have warranted that the labels act to protect their interests.
The article gives the companies credit for acknowledging the Internet as a
viable distribution platform, but criticizes them for their slow and
limited movements to get their entire catalogs in digital format.

(San Jose, Calif.) "Streaming Media West," a conference and trade show
focused on audio and video streaming media, will be held Dec. 12th - 14th
at the San Jose Convention Center in San Jose, California. Keynote
speakers will include Microsoft CEO Steve Ballmer and Yahoo CEO Jerry

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