"ARIA have their heads in the sand" when it comes to negotiating licences with online music sites, according to Paul Cashmere, executive producer of Whoopi!'s Radio Undercover.
Because ARIA is asking for a 20 percent share of revenues compared with the 2.6 percent it charges radio stations, Radio Undercover deals directly with individual record companies instead of their industry association, he said.
"The costs [ARIA seeks to impose] are quite ridiculous", Cashmere said.
Domenic Carosa is CEO of www.ehyou.com, the company behind www.mp3.com.au and was Cashmere's fellow panellist in a discussion of Napster, MP3 and digital rights at the Netfest conference in Melbourne.
He agreed that it was hard to negotiate with performing rights bodies. "I could debate for an hour why it isn't fair," he said, and asked "how much of that [the royalties collected] flows to the artist?"
Surveys show that people who use the Internet to find out about music are those that go out and buy, he said, claiming that analysts have ascribed the increase in music sales this year following a period of stagnation is due to the widespread use of MP3 and similar technologies.
Cashmere agreed, pointing to the fact that there were 22 million downloads of a track by The Offspring from an album that became their biggest seller, and that after Limp Bizkit gave away a preview of its 'Chocolate Starfish' album, it entered the US chart at number one.
"Bands that can't get airplay... get exposure [through] mp3.com.au, Undercover and so on," he said.
mp3.com.au allows artists to promote and sell their music, Carosa said. The company has a digital rights management platform that can, for example, prevent additional copies of a track being made or only allow it to be played for a certain period of time.
The system also calculates the royalties due and pays it directly to artists weekly or monthly rather than the record industry practice of quarterly or annual remittances.
And what of Napster? "The Bertelsmann-funded Napster (see story) is going to be a very different Napster than the one we see today," said Cashmere, who predicted the other big record companies will fall in behind Bertelsmann.
