Court Sets ASCAP Fees Paid By Online Radio
May 1, 2008 at 6:52 AM (PT)
Following a federal court decision WEDNESDAY, three major online services will pay an organization representing songwriters royalties of 2.5% of their music-related revenues for music streamed via the Internet between 2002 and 2009, reports THE WALL STREET JOURNAL. Under the terms of the order, YAHOO INC., TIME WARNER INC.'S AOL AND REALNETWORKS INC. could collectively owe up to $100 million to the AMERICAN SOCIETY OF COMPOSERS AUTHORS AND PUBLISHERS (ASCAP).
The decision by the U.S. District Court for the Southern District of NEW YORK applies to music that is "streamed." U.S. District Judge WILLIAM C. CONNER settled the matter of what rate should be paid; whether a royalty was due at all was not at issue. He did not set differing rates for Internet radio -- broadcasts that play songs in an order the user has no control over -- and on-demand services that let users choose the songs they hear. ASCAP's chief rival, BMI, already has a licensing deal with online services.
Terrestrial radio broadcasters pay ASCAP less than 2% of their revenue for similar licenses. The ruling said it was appropriate to charge online broadcasters more because they typically play more songs per hour than traditional radio stations. Online broadcasters already pay royalties to musical performers and record labels through SOUNDEXCHANGE.