MP3 Lockout?

Before Seagam’s Universal Music Group and Bertelsman’s BMG Music announced their link-up on April 7, there were rumors the announcement might mean a merger between America Online and CBS.

For musicians, it was just as big, and just as nasty as that. isn’t just an Internet Web store, and it isn’t just going to be a place where “Big Media” players try to create a little Internet stock of their own. It’s really the publisher’s best chance to stop this MP3 thing in its tracks.

MP3 is a free source music compression scheme, supported by hardware and Web sites, which lets people download and hold music without license. It’s also the best opportunity for artists to level the playing field with the people who publish their CDs. An artist who markets himself (or herself) through the Web, then issues their own CD, doesn’t need a publisher.

That’s really what scares the publishers, not the thought that someone might be listening to an unlicensed copy of a Phil Collins oldie. With GetMusic controlling the delivery, and publicity, for all artists under contract, Bertelsman and Seagram hope to force all musicians (worth signing) to give them Internet exclusivity over their work.

This will let them treat MP3 sites and players as what they consider them to be, which is software pirates. It will also give them incredible leverage over their distribution channels.

It’s an audacious and obvious plan.

If artists are locked up on, the publishers can capture all music profits, not just the publishing profits, but retail profits as well. If they create a multi-billion dollar Internet IPO in the process, it’s a door prize.

Once the Justice Department wraps up its little sideshow with Microsoft, I suggest it might want to take a look at the big picture, starting with clauses in Universal and BMG musicians’ contracts.

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