District Court Tells Yahoo, AOL To Pay Millions To Songwriters

from the watch-for-the-appeal dept

In the latest of many arguments about the various rights and payments companies need to pay for streaming music online, a district court has ruled that AOL, Yahoo and RealNetworks most likely owe millions to ASCAP for songs that they streamed to users between 2002 and today (and continuing on to 2009). This has nothing to do with the record labels -- ASCAP represents the songwriters -- but is yet another extraneous "license" where the terms are hardly clear, but basically serve to make it more difficult for anyone to play music. It was never in question that these sites would need to pay some kind of royalty -- the question was how much. The odd part of this ruling, though, is that the rate set by the judge is likely to be higher than the rate that traditional terrestrial radio pays. If there ever were a formula for making companies less interested in streaming music online -- this might be it. Of course, it's quite likely that this ruling will be appealed, so it's far from over.

Filed Under: ascap, compulsory licensing, royalties, songwriters
Companies: aol, realnetworks, yahoo


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  1. icon
    PaulT (profile), 2 May 2008 @ 12:43am

    Re: The Liscense is pennies on the dollar of revenue

    "Mike quote:
    "but is yet another extraneous "license" "

    It is not extraneous to the songwriter and it is not extraneous to the internet entity that is streaming music because it is the core of their offering."

    You're quoting the wrong part of that sentence. The rest of the quote was "where the terms are hardly clear, but basically serve to make it more difficult for anyone to play music".

    What's extraneous is that here's a valuable promotional resource that's being cut off because there's an obscure licence with unclear terms that may be required that not even the major corporations seem to understand.

    "Mike quote:
    "It was never in question that these sites would need to pay some kind of royalty -- the question was how much."

    Way to really dig in and research this. The actual rate is 2.5% of revenue. Think about it- this is for the core product offering of that internet radio station.

    And by the way rival songwriter collection BMI had already settled previously with Yahoo, AOL, RealNetworks."

    That kind of says it all, doesn't it? The mere fact that there's rival songwriter collectives with different licences is a big part of the problem. Besides, the big problem here isn't the big corporations - they can afford this - but the non-profit or independent web stations. A percentage of profits is fine, but some licence seem to want a specific flat fee per play - impossible for some stations to cover.

    .. and all so that songwriters can be paid multiple times for one piece of work.

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