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MySpace faces royalty challenge

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MySpace should set aside some of its revenues into a pool to compensate musicians, says an industry group.

"We think they should pay," a spokesman for British Music Rights, a group representing songwriters, publishers and performers, told us today.

At a MusicAlly music industry seminar this week, MySpace's European VP rejected the idea that MySpace owed anyone performance royalties.

Responding to a question from Jim Griffin, who pointed out that owners of public spaces such as pubs, hotels and stores contribute to a pool of money in exchange for a blanket license, Jamie Kantrowitz said that MySpace already gave musicians enough - in the form of web space, for example.

As for revenues, she suggested artists look elsewhere:

"People love to go to your show and buy your T-shirt," she said.

"MySpace users are interacting with music in the same way as they would in everyday life - in a store or on the radio."

It isn't surprising that songwriters and composers think there should be a cut. A digital pool for the public performance of sound recordings has existed for many years, and applies to stores and - in most parts of the world - radio too. (The USA is an exception, although a new organization now collects royalties on sound recordings played on webcasts.)

There's another precedent, too. P2P radio station Mercora pays royalties, and its usage model is very similar to MySpace. Many of MySpace's users spend most of their internet time on the site.

The BMR recently joined with indie labels and the Musician's Union to call for legitimizing P2P by monetizing the exchanges via a license.

It's worth noting that MySpace attracts quite a different demographic on each side of the pond. In Britain, it's a cult social network for artists. In the US, it's a teen phenomenon that recently usurped Yahoo! Mail as the most popular web destination for Americans.

BMR declined to elaborate on what kind of license mechanism should apply to MySpace, saying that it was a technical issue, and for the collection agencies. ®

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