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26 June 2001
Q & A
Lausanne hotelshoteles en Blackpool How many labels are involved?
We anticipate nearly all of the members of AIM (500+ labels) and IMPALA (1500 companies) will sign up. Over 150 UK and European labels have already signed up including; Beggars Group, XL Recordings, V2 Music, Mushroom, Gut, Poptones, The Echo Label, Play It Again Sam (PIAS), Roadrunner, Epitaph, Nave, Wagram, Grand Central, Soma, Glasgow Underground, Cherry Red, Dome, Mowax and Dorado. Mute, Warp, Telstar are amongst many others who have also committed to be part of the negotiations.
The deal also covers label members of the national trade associations from France (UPFI), Germany (VUT) and Sweden (SOM). We are fully expecting a complete take up throughout Europe. What artists are covered? -
The deal covers all artists signed to these labels
bed and breakfast Portowhose rights are available. This includes Muse (their album, Origin of Symmetry, went straight in at no. 3 in the UK albums chart this week), Ash, Paul Oakenfold, Tom Jones, Badly Drawn Boy, Underworld, Stereophonics (their album, Just Enough Education to Perform, is currently no.9 in the UK albums chart), Mogwai, The Avalanches, Moloko, Slipknot, Tricky, Miossec, Saint Germain and Belle & Sebastian. All in all, this will include thousands of artists from across Europe, in every genre imaginable. Who negotiated the deal? AIM was mandated to negotiate and close the deal by its Board and also authorised to do so by IMPALA. In December AIM retained the services of US entertainment lawyer Elliot Groffman to assist with negotiations. The deal was closed by a negotiating team appointed by AIM's board, consisting of Alison Wenham, AIM's Chair and Chief Executive, Helen Smith, AIM's Director of Business Affairs and Elliot Groffman, AIM's US lawyer. Their Napster counterparts were Hank Barry, interim CEO and Milton Olin, Chief Operating Officer. What does the deal cover? The deal covers master rights. It is a licence of the participating labels' sound recording rights for Napster's commercial file-sharing service (publishing is excluded except where it is controlled by participating labels).
The exact term is confidential though it will be for a significant period, years rather than months. When does the deal take effect? The deal will become effective with the launch of Napster's new membership service later this summer. How much is the deal worth? The specific financial terms of the deal are confidential. Is the deal based on the revenues from Napster's membership service? Yes. What will this mean in terms of accessing content on other web sites? The deal is non-exclusive so other web sites won't be affected What are the benefits of this deal for the general public? The deal means that cutting edge music in just about every genre imaginable will be available on Napster's file sharing service. The popularity of this music speaks for itself: 40% of new British artists who produced UK gold albums and 30% of those who produced UK platinum or multi-platinum albums during the 1990s were sourced by independent record companies. There is a natural synergy between Napster's 60+ million enthusiasts and the fans that support the independent record sector. The repertoire that the deal covers is very likely to be music that fans will most wish to swap and recommend. The Napster model is also the perfect way of following your favourite bands. Putting these together it's easy to see why the deal is perfect for music fans. In addition, because participating artists are rewarded for their creativity, they will be more likely to make further great music. This will ultimately enrich the musical landscape for all to enjoy. What are the benefits of this deal for artists? Artists signed to participating labels will now be paid for use of their repertoire on Napster's file sharing service. This is a core revenue stream for artists - it's how they can make money. This will add tangible financial benefit to the value already offered by Napster, It means their music is now authorised to be accessible throughout the world. This is a huge step forward in terms of distribution and levels the digital playing field with respect to artists signed to majors. We believe that Napster is an excellent distribution vehicle that will result in increased revenues for our artists and labels. Payment to the Artists will be according to the existing arrangements between labels and their artists, which will vary from one label to another. It's worth noting that independents rely on a more personal and equitable relationship between label and artist, with artists' interests kept front of mind. What are the benefits of this deal for AIM members and independent labels? It means labels will now be paid for consumption of their music, (which is after all, their core income stream). It's a major step forward as far as distribution of their repertoire. This levels the playing field considerably with respect to the majors. Following on from AIM's internet trial, this is the first time independent labels have acted collectively as a major on such a large scale. This is what made the deal so attractive - the administrative burden alone rules out the option of negotiating on a label by label basis. Signing the deal has demonstrated the independents' willingness to adopt new business models to distribute their artists' music. This, together with the template created by the deal, places independents in a leading position to exploit future opportunities in both new and traditional media. It may also serve to create a template for other communities of independents to use with Napster and other online services. What are the benefits of this deal for Napster and the Napster community? This is an important agreement for Napster, as it will make a wealth of authorised music available for sharing as part of Napster's new membership-based service. More importantly, the nature of this repertoire - a diverse selection of the most cutting edge music in just about every genre imaginable - has terrific synergy with Napster's fan-based membership. This agreement will lead to other agreements with independent labels and artists, for whom the same licensing terms will be available equally, all of which will lead to more music available to the music fans who are members of the Napster community. What is the likely impact of this deal on the future of file sharing? Napster has already proven that people want to share files, it is now out to prove what our users have told us: that they are willing to pay for it. If this is successful, file sharing could become a predominant source of music for an entire generation. And Napster is an excellent distribution vehicle for development of new artists and the sale of CDs. Napster's trailblazing technology also opens up the market for other services to follow in its wake. Does this mean Napster won't be free any more? This was already the case - Napster pledged to create a membership based service when it signed a deal with Bertelsmann in October. For the record, the independent record sector values Napster highly, as it is itself a cluster of fan-based communities. This agreement serves to preserve Napster and file sharing in a way that enables independent labels and artists to be paid for their creativity. It will greatly benefit fans and artists. How does AIM feel about the launch of Napster's membership-based service? If the quality is controlled, the price is right and everyone gets their fair share, then it's a very progressive move for digital distribution. It's exciting to be a key part of such an important global development for music. It is a vital boost for the distribution of our members' and artists' repertoire, which levels the playing field considerably with respect to the majors. We look forward to the success of this already world famous service and to driving expansion of the music market wherever our members may benefit. What will the membership-based service look like and when will it launch? Napster currently is building the new technology to convert to a membership-based service later this summer. We anticipate that further details about the new service will be available soon. Will AIM have any influence on the nature of the membership-based service? Yes - Alison Wenham, AIM's Chief Executive, will be an advisor to Napster. She will advise on, among other things, Napster's consumer offer and distribution policy. How does this agreement relate to AIM's other online initiatives? AIM launched its internet trial last July, to create a collective structure for certain internet uses of music (such as webcasting and clips). In the face of no appropriate licensing structure and a completely open market, it was essential to negotiate collectively to facilitate use of our members' repertoire. This is important not only to make sure our labels can participate in a vital market but also to ensure that users have ease of access to the independent sector, which they need to enhance the quality and range of their products. The Napster deal is a separate initiative undertaken with individual label consent, for the same reasons as the internet trial. This agreement highlights the potential for membership-based music services on the web. This comes at a time when the European Commission is conducting a competition enquiry into the majors' joint-venture online subscription services. Access to new markets is vital to both consumers and the health and diversity of the music landscape. It is paramount that all labels are granted fair and equal access to new internet opportunities. Media Contacts:
AIM
Sam Shemtob 020 8994 5599, 07957 227183 sam@musicindie.com
Napster Business and Tech Media Paul Breton/Karen DeMarco mPRm Public Relations 323-933-3399 x 210/238 pbreton@mprm.com; kdemarco@mprm.com
Consumer Media: Jill Mango, Tobey Dorschel Girlie Action Media 212-334-3200 x 111/106
IMPALA Heidi Lambert Communications in Brussels on Tel: +32.2.732.55.46
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