Bowie is represented by EMI Group-owned Virgin Records but owns the copyrights on some of his master recordings. This makes him one of a handful of major artists not covered by previous settlements worked out with major record labels over the controversial streaming service, dubbed My.MP3.com.
MP3.com faces ongoing litigation from some independent labels and artists, although its potential liability from those cases will likely amount to a fraction of the settlements paid to date. In addition, the company continues to negotiate with several individual groups and artists, including Tom Petty and the Eagles, for rights to some of their hit songs.
"If they own their own stuff, in order for us to get the copyrights we would have to negotiate that with them," said John Diaz, MP3.com's senior vice president of industry relations, who works on licensing deals for the company.
Monday's deal points to the complex copyright licensing arrangements that are typical in the music industry, where an overlapping group of songwriters, performers, record labels and music publishers frequently share royalty payments on the broadcast of a single song.
The vast majority of music rights are negotiated on behalf of the various parties by rights clearinghouses such as the Harry Fox Agency; the American Society of Composers, Authors and Publishers (ASCAP); Broadcast Music Inc. (BMI); and the record labels. Only in rare cases would artists own and individually negotiate the rights to their music.
"I would think that MP3.com has put its troubles behind it" with the lawsuit settlements to date, said Chris Amenita, vice president of new media and technology for ASCAP, which has a licensing deal with MP3.com. "Ninety-nine percent of the time, the artists don't individually negotiate these deals."
Bowie will not receive up-front licensing payments under Monday's deal but will get a fee of one-third of a cent per stream for each master recording and a further quarter of a cent for each publishing copyright held. The agreement means that fans who have purchased Bowie CDs will be able to listen to those tracks legally through My.MP3.com from any computer with Internet access.
Although the deal is not Bowie's first embrace of the Net, it's a publicity boost for MP3.com's locker service.
My.MP3.com has been the subject of considerable ire among the major record labels for nearly a year. The Big Five record labels--Sony Music Group, Warner Music Group, EMI Recorded Music, Seagram's Universal Music Group and Bertelsmann's BMG Entertainment--have largely won legal battles against the company for copyright infringement.
MP3.com amassed a database of some 80,000 songs that could be tapped over the Internet by customers who proved they had purchased the same music on a CD. But unlike other locker services such as Myplay.com, MP3.com did not require its customers to copy their own CDs; instead, it provided a ready-made database of songs. It also did not secure licensing deals with record companies before launching the service.
Four of the Big Five labels reached settlements and licensing agreements with MP3.com. But Universal won a consent judgment in which MP3.com will pay $53.4 million to end the legal battle, potentially sparking a new legal battle among the other labels contending that their settlement terms should match Universal's deal.
Despite the legal quagmire, Bowie seems to be a believer in My.MP3.com.
"It's an amazing testament to the Net that MP3.com technology allows someone to have their record collection at their fingertips wherever they are in the world," Bowie said in a statement. "The days of traveling with CDs in hand are beginning to grow short."
Bowie has taken several giant steps onto the Internet. In 1998, he launched his own online service, BowieNet. For $14.95 a month, the service offers fans dial-up Internet access, an email account, online chats with the artist and special guests, access to Bowie's artwork, and unreleased material from his body of recordings. Fans can also subscribe to a version of the service without the ISP for $5.95 a month.
Bowie joins several other artists who are working with MP3.com to offer their songs to fans. The company lists Paul Simon and the Cowboy Junkies as having released songs on MP3.com.
While many recording artists are turning to the Web to distribute their songs, there's an increasing division over the means to do so.
Artists such as Courtney Love and The Smashing Pumpkins have tried to snub the major labels by releasing songs directly onto Napster, the controversial music-swapping software that has come under legal fire from the labels.
Alternately, artists such as Metallica and Dr. Dre have taken firm stances against Napster, joining the labels in pursuing legal action to halt what they deem illegal distribution of their songs. Rock 'n' roll veterans Elton John and Paul McCartney sounded off Monday against free music swapping, claiming technologies such as Napster would hurt artists as well as record labels.
"I think there's a divide among musicians about whether this tool can work in their favor or eventually hurt them," said Idil Cakim, an analyst at Cyber Dialogue. "I think the issue of how the artist is going to make a gain out of this is still pending."