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. identicon
    Willton, 3 May 2008 @ 11:24pm

    Re: Re: Re: Re: Re:

    Yes, thanks to totally unnecessary and market distorting compulsory licenses like this one.

    Do you think journalists all do crappy work because they're paid on the clock?

    No, but I do think a journalist's work takes less creativity and is less risky than a songwriter's work. That's why papers will employ journalists on a salary basis: their work is more reliable as a selling tool, even if it is less rewarding. The converse is true as to why record labels/artists/producers will not do the same for songwriters: employing songwriters entails taking on a lot of risk, and they likely are not willing to shell out the money for it unless the work sells. Even seasoned veteran songwriters write stinkers that won't sell.

    If it makes sense to pay musicians on a compulsory license, why not pay journalists the same way?

    Because a journalist's work is typically a work made for hire. A songwriter's work is typically not. Plus, compulsory licensing is a statutory license imposed only upon phonorecords containing non-dramatic musical works. Freelance journalists who still own their works' copyrights at least still have some bargaining power with regard to those works.

    Willton, has it occurred to you that I do know how the market works, but maybe (just maybe) I'm pointing out that it doesn't need to work that way? In fact, that it shouldn't work that way? You seem to have this bizarre belief that because the market works this way, thanks to market distorting policies, it always needs to work that way.

    It does not. That is all I'm pointing out.

    The problem is that you seem to think that we can fit a square peg into a round hole. Mike, the journalism business and the music business are apples and oranges, and while you may be more sophisticated in economics than I may be, there are rather obvious shortcomings in your proposal that you seem to not want to address. Making a bald assertion like "Songwriters will get paid to write songs" without explaining why, how, or in this case by whom, renders your argument weightless.

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