MP3.com settles with publishers

Internet music service MP3.com says it has reached a preliminary $30m licensing arrangement with the major music publishers - in a bid to settle a copyright lawsuit.

The agreement will allow the site to store more than a million pieces of music from major artists.

But it means MP3.com will have to pay a royalty of 0.25 cents each time a song is delivered to a customer over the internet.

The agreement will be seen as another victory for the music industry, which feared MP3 technology would wipe out its revenues.

Separate label deal

MP3.com's deal has been reached with the US-based National Music Publishers' Association and its licensing subsidiary, The Harry Fox Agency.

The NMPA has 700 members including MPL Communications, controlled by former Beatle Paul McCartney, and Peer International Corporation, which filed a law suit in March against the Internet site.

The proposed three-year licensing arrangement provides that MP3.com pay up to $30m for the benefit of up to 25,000 music publishers and their songwriter partners as part of two equal funds, according to a joint statement.

It still has to be agreed by the heads of the individual music publishing companies.

The agreement is separate from MP3.com's deal with the major music labels. It has agreed to pay royalties to all of the major labels, except Universal.

A court in New York last month ruled MP3.com must pay between $125m to $250m to Universal. An appeal is pending.

MP3 is a technology for compressing music or speech into a small file, about one twelfth the size of the original.