ASCAP Wins Big Fees For Music Streaming

After a lengthy decision, U.S. District Court Judge William Conner accepted American Society of Composers, Artists, and Performers (ASCAP) methodology for calculating the cost of a blanket license, but rejected the organization’s argument for a flat 3% fee. Conner believed that 3% of each company’s music revenues was too high. But don’t get teary yet, ASCAP may have millions coming to them.

Thanks to the ruling, ASCAP may be owed as much as $100 million by America Online, Yahoo and Real Networks for the use of copyrighted material in streaming audio on the Web.

“After consideration of all the factors above,” Conner stated, “the court finds that a fee rate of 2.5 percent of applicant’s music-use adjusted revenue is reasonable. Such a rate would result in 2006 fees of approximately $5.95 million for AOL and $6.76 million for Yahoo.”

The potential size of the ruling stems from the fact that it covers a multiyear period, beginning on July 1, 2002, and running through December 31, 2009. The precise amount is still not certain, due to some missing information regarding Real Network revenues during the period.

The 153-page decision’s size is largely due to the exhaustive testimony and proposals presented by the two sides during 13 days of hearings between Oct. 25 and Nov. 15, 2007. Among other things, Connor said, he received 203 exhibits from the parties and more than 600 pages of proposed findings.

Much of the complication in the case stemmed from the myriad ways in which online services use copyrighted music, and the challenge of finding comparable licensing agreements. As both parties and the court noted, it is difficult to keep track of how music is used online today, let alone the ways it might be used in the future.

Author: FutureMusic

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