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The groups, which represent record labels, music publishers, songwriters, and music Web sites, say their proposal would resolve what has been a source of strife between the music industry and Web sites that offer on-demand streaming services.

Under the agreement, sites like Napster and Imeem would have to begin paying royalties of about 10.5 percent of revenue. Download services like Amazon MP3 and iTunes already pay such fees. And online radio sites saw a major royalty hike last year. Pandora, one such site, may be on the brink of going out of business due to that rate increase, according to its founder, Tim Westergren.

The organizations involved were the Digital Media Association, the Nashville Songwriters Association International, the National Music Publishers Association, Recording Industry Association of America, and the Songwriters Guild of America.

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And surprisingly, EFF doesn't necessarily want Microsoft to also offer refunds. After Microsoft shuttered MSN Music, the company announced last spring that it would stop issuing DRM keys. After being criticized, Microsoft decided to continue supporting its music for three more years. McSherry said that Microsoft's decision ensures that customers get what they paid for. That's all EFF wanted.

"In both cases, each of the companies has been forced to acknowledge they must do right by their customers," McSherry said. "I do hope that any other vendor (selling DRM-protected media), learns a lesson. They all must live up to the conditions that they set when they sold their music."

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MSN Entertainment and Video Services general manager Rob Bennett sent out an e-mail this afternoon to customers, advising them to make any and all authorizations or deauthorizations before August 31. "As of August 31, 2008, we will no longer be able to support the retrieval of license keys for the songs you purchased from MSN Music or the authorization of additional computers," reads the e-mail seen by Ars. "You will need to obtain a license key for each of your songs downloaded from MSN Music on any new computer, and you must do so before August 31, 2008. If you attempt to transfer your songs to additional computers after August 31, 2008, those songs will not successfully play."

This doesn't just apply to the five different computers that PlaysForSure allows users to authorize, it also applies to operating systems on the same machine (users need to reauthorize a machine after they upgrade from Windows XP to Windows Vista, for example). Once September rolls around, users are committed to whatever five machines they may have authorized-along with whatever OS they are running.

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While radio does pay a fee to songwriters, it pays no performance rights fee, in contrast to just about every other developed country on the planet. The broadcasters argue that they are providing free advertising to musicians, who then make money from touring and record sales. Plenty of artists don't buy this (especially older artists who don't tour or sell albums, but whose hits still keep oldies stations in business), and they can't see why radio is exempted from paying for the music it uses to rake in ad dollars. Tom Waits, one of the most innovative singer/songwriters of the last quarter century, helped to found the musicFIRST coalition that advocates for a performance fee. "It's just plain wrong for radio to be allowed to build profitable businesses with growing revenues on the backs of artists and musicians without paying them fairly for it," he said in a statement today.

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Pål asked 50 Cent: “How are G-Unit Records doing in these times of file-sharing?

“Not so good.” he responded. “The advances in technology impacts everyone, and we all must adapt. Most of all hip-hop, a style of music dependent upon a youthful audience. This market consists of individuals embracing innovations faster than the fans of classical and jazz music.”

“What is important for the music industry to understand is that this really doesn’t hurt the artists.”

Thats quite a statement. Organizations like the RIAA are always talking about how the artists get hurt by file-sharing but 50 Cent clearly doesn’t agree. In fact, he appears to appreciate the value of a good fan, whether he buys or file-shares his music, as he explains:

“A young fan may be just as devout and dedicated no matter if he bought it or stole it.”

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The video gaming industry is poised to overtake the music industry in the US, with global spending on video games surpassing music spending as soon as this year, according to consulting firm PricewaterhouseCoopers. PwC released the data in its annual "Global Entertainment and Media Outlook" report covering 2007 through 2011, which outlines expected growth in the entertainment, film, music, and video game industries, among others.

The information not only reflects the gaming industry's strong trajectory but also serves as a painful reminder that the music industry continues to suffer. EMI recently reported, however, that sales of its DRM-free songs and albums have been good since the launch of iTunes Plus, with CD sales of those same albums dropping during that time. If the gains made by selling DRM-free music online outpace the losses from CD sales, EMI's decision to go DRM-free will prove to be a good one, and the rest of the industry may follow suit.

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Apple on Wednesday began selling unprotected MP3s from record label EMI. Shoppers have the option to purchase either a 256kbps AAC-encoded DRM-free song for $1.29 via iTunes Plus, or the usual 128kbps AAC-encoded DRM version for 99 cents. The move is important on many levels. For the first time, consumers can play music from Apple's iTunes on digital players other than the iPod. For Apple, offering DRM-free songs could hand the company some credibility in dealings with European regulators, who want the company to open up iTunes to third-party hardware makers.

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As expected, all the songs from music label EMI that are sold on iTunes are now available in DRM-free versions. Shoppers have the option to purchase either a 256kbps AAC-encoded DRM-free song for $1.29 via iTunes Plus, or the usual 128kbps AAC-encoded DRM-version for 99 cents. "We expect more than half of the songs on iTunes will be offered in iTunes Plus versions by the end of this year," Apple CEO Steve Jobs said in a statement. No one at Apple was available for live comment on Wednesday morning.

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Late last month, Rep. Jay Inslee (D-WA), Sen. Ron Wyden (D-OR), and Sen. Sam Brownback (R-KS) introduced the Internet Radio Equality Act (IREA), which would overturn the CRB's new fee structure. Instead, SoundExchange would continue to receive a percentage of the webcasters' revenue, which would be set at the same 7.5 percent mark paid by satellite radio providers. The IREA was a major factor in SoundExchange's decision to roll back the clock on the licensing fees, which the licensing group admitted in a press release announcing the extension. "Although the rates revised by the CRB are fair and based on the value of music in the marketplace, there's a sense in the music community and in Congress that small webcasters need more time to develop their businesses," said John Simson, executive director of SoundExchange. "Artists and labels are offering a below-market rate to subsidize small webcasters because Congress has made it clear that this is a policy it desires to advance, at least for the next few years."

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For years, stations have paid royalties to composers and publishers when they played their songs. But they enjoy a federal exemption when paying the performers and record labels because, they argue, the airplay sells music. Now, the Recording Industry Assn. of America and several artists' groups are getting ready to push Congress to repeal the exemption, a move that could generate hundreds of millions of dollars annually in new royalties. Mary Wilson, who with Diana Ross and Florence Ballard formed the original Supremes, said the exemption was unfair and forced older musicians to continue touring to pay their bills.

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National Public Radio spearheaded the appeal, arguing that the CRB's decision was an "abuse of discretion" and saying that the judges did not consider the ramifications of a new royalty structure. Under the new royalty schedule, NPR will see its costs skyrocket. The judges were unmoved by the webcasters' arguments. "None of the moving parties have made a sufficient showing of new evidence or clear error or manifest injustice that would warrant rehearing," wrote the CRB in its decision. "To the contrary... most of the parties' arguments in support of a rehearing or reconsideration merely restate arguments that were made or evidence that was presented during the proceeding."

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Consumers who have already purchased EMI tracks containing Apple's FairPlay copy protection will be able to upgrade them to the premium version for 30 cents, EMI said. Full albums in DRM-free form can be bought at the same price as standard iTunes albums. "We are committed to embracing change, and to developing products and services that consumers really want to buy," said Eric Nicoli, chief executive of EMI. Nicoli cited internal EMI tests in which higher-quality, DRM-free songs outsold its lower-quality, copy-protected counterparts 10-to-1.

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Four major broadcast companies would pay the government $12.5 million and provide 8,400 half-hour segments of free airtime for independent record labels and local artists, The Associated Press has learned. The agreement is aimed at curbing payola - generally defined as radio stations accepting cash or other consideration from record companies in exchange for airplay. The practice has been around as long as the radio industry and was made illegal after scandals in the late 1950s. Two Federal Communications Commission officials, who spoke on condition of anonymity because final language has not been approved by the full commission, said the monetary settlement is part of a consent decree between the FCC and Clear Channel Communications Inc., CBS Radio, Entercom Communications Corp. and Citadel Broadcasting Corp.

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Late in the afternoon of Jan. 16, a SWAT team from the Fulton County Sheriff's Office, backed up by officers from the Clayton County Sheriff's Office and the local police department, along with a few drug-sniffing dogs, burst into a unmarked recording studio on a short, quiet street in an industrial neighborhood near the Georgia Dome in Atlanta. The officers entered with their guns drawn; the local police chief said later that they were "prepared for the worst." They had come to serve a warrant for the arrest of the studio’s owners on the grounds that they had violated the state's Racketeer Influenced and Corrupt Organizations law, or RICO, a charge often used to lock up people who make a business of selling drugs or breaking people’s arms to extort money. The officers confiscated recording equipment, cars, computers and bank statements along with more than 25,000 music CDs. Two of the three owners of the studio, Tyree Simmons, who is 28, and Donald Cannon, who is 27, were arrested and held overnight in the Fulton County jail. Eight employees, mostly interns from local colleges, were briefly detained as well.

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To woo that set, Microsoft has been pitching the Zune in TV spots, outdoor ads, print ads and online promos, mainly trying to get into the heads of those aged 18 to 28. But even with a decent size marketing budget, Microsoft knows it may need to buy more ads to try to get the Zune better known. The company's initial goal was to have its ads reach about one quarter of those in its target age range, and reach them at least three times. It has TV ads that have run in shows like Prison Break, Family Guy and Grey's Anatomy, and has inserted print ads in magazines such as Scratch, Paste, Spin, Vibe and Rolling Stone. There are also online ads on sites like AOL, Billboard and MTV, as well as on Microsoft's own MSN site.

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The leading DRM digital download service, Apple's iTunes, has experienced a collapse in sales revenues this year according to analyst company Forrester Research. Secretive Apple doesn't break out revenues from iTunes, but Forrester conducted an analysis of credit card transactions over a 27-month period. And this year's numbers aren't good. While the iTunes service saw healthy growth for much of the period, since January the monthly revenue has fallen by 65 per cent, with the average transaction size falling 17 per cent. The previous spring's rebound wasn't repeated this year. And it isn't just Apple's problem. Nielsen Soundscan has grimmer news for prospective digital download services, indicating three consecutive quarters of flat or declining revenues for the sector as a whole.

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NEW YORK (Reuters) - Universal Music Group Chief Executive Doug Morris said on Tuesday he may try to fashion an iPod royalty fee with Apple Computer Inc. in the next round of negotiations in early 2007.

Universal, the world's largest music company, owned by French media giant Vivendi, was the first major record label to strike an agreement with Microsoft Corp. to receive a fee for every Zune digital media player sold.

"It would be a nice idea. We have a negotiation coming up not too far. I don't see why we wouldn't do that... but maybe not in the same way," he told the Reuters Media Summit, when asked if Universal would negotiate a royalty fee for the iPod that would be similar to Microsoft's Zune.

"The Zune (deal) was an amazingly interesting exercise, to end up with a piece of technology," he added.

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It also means the earliest official recordings from The Beatles, from 1963, will be out of copyright in 2013. Music journalist Neil McCormack told BBC Radio Five Live it was a blow to the industry. "This was set before the advent, the big boom of rock and roll. The boom in popular culture which has led to a whole vast number of people making their living from these royalties. "You can make a record in 1955 and have been getting royalties... been living on that and suddenly they're gone."

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The problem has arisen because tracks from the MSN Music site are compatible with the specifications of the Plays For Sure initiative. This was intended to re-assure consumers as it guaranteed that music bought from services backing it would work with players that supported it. MSN Music, Napster, AOL Music Now and Urge all backed Plays For Sure as did many players from hardware makers such as Archos, Creative, Dell and Iriver. In a statement a Microsoft spokesperson said: "Since Zune is a separate offering that is not part of the Plays For Sure ecosystem, Zune content is not supported on Plays For Sure devices."

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"That's a big part of what I think SanDisk and every other hardware manufacturer has to be wondering," McGuire said. "What's going to happen when Zune hits the marketplace?" IDC's Kevorkian said that the software maker may be waiting to see how well it does before deciding how much effort to continue to put into PlaysForSure. "Microsoft is in a position where they can hedge their bets," she said, but added "if Zune is successful in the short or long term, we believe the Microsoft is going to de-emphasize (the) Windows Media technology."

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But the artists argue online distribution leaves them with too small a profit. And, they say, iTunes wrecks the artistic integrity of an album by allowing songs to be purchased by the track for 99 cents. Some bands, such as AC/DC have released albums on other, more flexible sites, but not iTunes. "We've always thought certain artists put out albums that aren't meant to be compilations with 50 other artists," said Ed "Punch" Andrews, manager for both Seger and Kid Rock. "We're hoping at some point albums become important again like they were in the past 30 years."

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"We've been publicly trying to convince record labels that they should be selling MP3s for a while now," writes Yahoo Music blogger Ian Rogers. "DRM has a cost. It's very expensive for companies like Yahoo! to implement. We'd much rather have our engineers building better personalization, recommendations, playlisting applications, community apps, etc, instead of complex provisioning systems which at the end of the day allow you to burn a CD and take the DRM back off, anyway."

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Tower Records chief marketing officer Russ Eisenman said the digital store fit perfectly with Tower's history of offering music in all formats that prevailed throughout its 45-year history. All of the music is in Microsoft's Windows Media Audio format, encoded at a higher bit rate than most other online stores to provide better audio fidelity.