The agreement will not only give San Francisco-based Kickworks the rights to the recordings of all RIAA members, but consumers will be able to use these songs in online radio broadcasts, the company said. In turn, Kickworks will pay royalty fees to compensate the musicians.
This week's announcement is yet another sign that the record industry is starting to open its catalog of music to third parties for distribution. The RIAA "definitely recognize that music is going to be broadcast in a number of different ways. And right now, it's a digital format that they need to be involved in," said Jarvis Mak, a senior analyst at Nielsen/NetRatings. "This is a step for them to protect their artists."
"It certainly demonstrates our commitment to licensing and encouraging the use of the music on the Internet and developing innovative ways to do so," said Steve Marks, RIAA's senior vice president of business affairs.
Kickworks said it plans to launch its radio broadcast service at the end of the year. The service will let people download software to create their own online broadcasts that other Web surfers can listen to.
Chief Executive Matt Hackett said although the company hopes to offer the service for free, it will gain revenue from targeted advertising streams inserted between songs. Hackett added Kickworks would charge a license fee for Web site operators who want to place its technology on their Web sites.
"What we're about is allowing people to create radio for other people to listen to, and that's really why our deal with the RIAA is so unique in this area," Hackett said.