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Editorials
Thursday, November 16, 2000Music finds
legitimate place
on the InternetThe issue: Music companies have reached a final settlement with the online company MP3.com for people to listen to their product on the Internet.
SETTLEMENT of a lawsuit by a major music producer against an online music company has produced a breakthrough allowing the Internet to be a legitimate participant in the industry. The resulting agreement should be a model for other Web sites in the distribution of music.
MP3.com compiled a database of some 80,000 compact discs and has allowed users to listen to music from that database, as long as the users could prove they own copies of the music. Users could prove ownership by briefly inserting their CDs into a computer's CD-ROM drive. Although that was easier for consumers than having to copy their music and store it on an online locker, federal Judge Jed S. Rakoff of New York ruled in September that it violated copyright laws.
MP3.com has agreed to pay Seagram's Universal Music Group $53.4 million to settle the suit. Other music companies reached a settlement with MP3.com over similar issues last month. Also, MP3.com has agreed to pay the companies and the publishers royalties each time a song was stored and listened to on its My.MP3.com service.
The total amount of the settlements is believed to approach the $170 million that MP3.com set aside to cover legal costs. In addition, the royalty fees that MP3.com has agreed to pay the music companies and publishers are believed to be steep. However, the Internet company is expected to turn a good profit through subscription fees, advertising and marketing data about music fans. The company's stock shot up by 52 percent shortly after the settlement was announced.
"Universal Music pursued this case to send a strong message that copyrights will be protected and that copyright owners and artists need to be properly compensated for use of their work," said Zach Horowitz, president of Universal Music Group. Horowitz added, "It was never our intent to put MP3.com out of business with a judgment so large that it would threaten their viability as a company."
Michael Robertson, MP3.com's chief executive officer, said the arrangement "provides clear evidence that the needs of rights holders and music fans can be accommodated in the digital music space."
Now it is Napster's turn to reach a similar agreement. Unlike MP3.com, Napster serves as a clearinghouse in allowing users of its Web site to share their music over the Internet. Music industry giants are suing Napster for copyright infringement and seek to shut it down. Media giant Bertelsmann has said it would join Napster in developing a system of guaranteeing royalties to artists.
Universal Music Group and other music producers have shown good judgment in accommodating MP3.com's service instead of trying to shut it down. The agreement is not expected to eliminate music piracy on the Internet but it gives people a legitimate way to use the Internet to satisfy their love for music.
TWO men who brought innovation and distinction to their careers in Honolulu died this week. While Dr. Ralph Bingham Cloward gained international recognition for his advances in neurosurgery, Kan Jung Luke's spirit and savvy as a developer and banker contributed significantly to Honolulu's growth. Ralph Cloward,
K.J. LukeCloward, who died Monday at age 92, specialized in treating spinal injuries but was not content with established practices. Instead of merely removing damaged discs, Cloward would replace them with small plugs of bone taken from other parts of the patient or from a cadaver. He founded the first bone bank in the United States to facilitate his technique.
Cloward also devised a safer and easier method of operating on cervical discs of the neck from the throat, called an anterior approach, instead of from the back of the neck. In a highly publicized case, the Rotary Club of Honolulu paid the expenses to bring a girl and her mother from Poland to Hawaii for his successful treatment of the girl's spinal tumor, which Polish doctors feared was terminal.
A consultant in neurology and neurosurgery, Cloward was chief of the neurosurgery staffs at Queen's, St. Francis and Kuakini hospitals. He authored scores of technical articles in medical journals as early as 1937. While away from the hospital, Cloward played the clarinet with the Royal Hawaiian Hotel Orchestra and the Honolulu Symphony.
Luke, who died Saturday at age 86, grew up working in his family's Big Island grocery store and bakery. He rose to become the founder of Hawaii National Bank in 1960, then the state's only federally chartered bank. He also co-founded Loyalty Enterprises Ltd., Loyalty Development Co. Ltd. and Moanalua Terrace Associates and served on numerous corporate boards, including Aloha Airlines, Queen's Hospital and Hawaiian Electric Co.
Before becoming a banker, Luke bought and sold real estate and promoted new development and business ventures. He and partner Clarence T.C. Ching bought 233 acres known as the Damon Estate in 1956 and developed it as the airport industrial area.
In their respective pursuits, Cloward and Luke were important figures in Hawaii's progress during the past century.
Published by Liberty Newspapers Limited PartnershipRupert E. Phillips, CEO
John M. Flanagan, Editor & Publisher
David Shapiro, Managing Editor
Diane Yukihiro Chang, Senior Editor & Editorial Page Editor
Frank Bridgewater & Michael Rovner, Assistant Managing Editors
A.A. Smyser, Contributing Editor
