December 03, 2007

By By Antony Bruno, Denver

Details of a relatively new online music streaming policy from Universal Music Group have emerged as a result of one artist's communication with her fans.

Colbie Caillat, who found an early audience on MySpace, apologized to fans via her MySpace profile for suddenly limiting her streaming songs to shorter clips. "Due to circumstances beyond my control, I have to swap the songs out on my page for 90 second versions instead of full-length versions ... Every Universal label has to comply immediately," Caillat wrote.

A source close to the situation confirmed that the policy is indeed being applied to all UMG labels and artists. According to the source, streaming music will be limited to either 90-second clips or full-songs that contain promotional voice-over messages. Excluded are any services with which UMG has struck a commercial licensing deal that compensates them for each stream.

According to the source, UMG is concerned that unlimited free on-demand streaming of full songs online will substitute the need to buy the track or the album. "It goes from in the beginning being promotional, to becoming substitutional when it becomes large numbers," the source says.

The policy is a few months old, the source says, and applies to all online services -- not just MySpace.

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