What the ASCAP music decision means for consumers
There's no mistaking who benefited from a federal-court decision to set licensing fees that three top Web services must pay songwriters and publishers for the right to stream their music.
But the question left unanswered is whether the losers also include consumers.
AOL, RealNetworks, and Yahoo may end up paying the American Society of Composers, Authors, and Publishers (ASCAP) $100 million as a result of a decision by a U.S. district judge to set the licensing fee for streaming music at 2.5 percent of adjusted music-use revenue.
"(The court's decision) is a victory for songwriters, composers, and publishers, and something they have been looking forward to for a long period," said John LoFrumento, ASCAP's chief executive. "In the past, we've settled with (Internet companies) at low rates. We wanted to encourage the growth of these businesses, but these businesses have matured...they have been using our members' music to attract people to their Web sites...it's time to compensate (our members)."
While none of the Web companies involved would comment on the judge's decision, a source close to the three sounded like the players on a baseball team after the other side just hit a walk-off home run.
"This wasn't good for us, to say the least," the source said, adding that the judge's order isn't yet final and that the three companies plan to continue fighting.
If the final fee structure looks anything like what is prescribed in the judge's written opinion, RealNetworks, Yahoo, and AOL would likely have to raise prices. It may also mean that the cost of doing business for anyone streaming music over the Web just went up.
"What this means to other licensees is, they now see what a standard benchmark fee should look like," LoFrumento said. "They now know what to expect from the rate court."
The three Web services had negotiated with ASCAP to obtain a license for unlimited play on the Web of any of the millions of songs in ASCAP's repertory. Following a stalemate, the two sides took their case to a rate court. The court's mission in the case was to determine a fair licensing fee.
The judge considered proposals from both sides. AOL, Yahoo, and RealNetworks wanted a multitiered plan with different rates, depending on the nature of the stream. For example, the three Web services wanted to pay 2.5 percent for on-demand audio, 1.7 percent for Internet radio, and .9 percent for music videos.
ASCAP scoffed at those figures. It said any structure should be set up to charge a percentage of a Web service's net revenue.
When it came to actual dollars, the two sides were worlds apart. Under the formula the Web services proposed, AOL and Yahoo would have paid ASCAP respectively $872,000 and $1.1 million for the year 2006.
Under ASCAP's plan, AOL and Yahoo would have paid $7.8 million and $7.3 million for the same year.
Jonathan Potter of Digital Media Association, a trade organization devoted to companies competing in online audio and video sectors, said the Web services involved absolutely want to fairly compensate songwriters and music publishers.
"We are disappointed, however, that the court ruled that online services' royalties should be based in part on service-wide revenue," Potter said, "(and) not simply on revenue directly attributable to music usage."
Greg Sandoval covers media and digital entertainment for CNET News. He is a former reporter for The Washington Post and the Los Angeles Times. E-mail Greg.
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artists themselves) and the publishers (and ASCAP which is the
songwriters' union). This is different than the greedy record
companies who screw the artists and sue the downloaders.
Broadcast Music Inc. and the songs represented by them. Will these
companies also have to pay BMI?
excessive royalties demanded by ASCAP for the use of popular
music for broadcasting!
I guess the origins of BMI have been mostly forgotten now...
The good thing is that bands "members" will support the creation of their very own avenues of distribution over the Net or elsewhere. Stop supporting the bureaucracy of yesterday/today and get on with working for a better tomorrow. We all know - or let this enlighten you, most artists and writers are not living well, due to the fat cats in ASCAP and other institutions who are only leaches, whom pull on true talent like parasites.
Okay, enough already. Money is the root to all evil. We do not have to let it destroy our treasures. Determine ways to better a system and flip the giant on it's back.
This is all just more 'gimme free or else I'll steal it'
musicians! In the end its entertainment, nothing necessary. If
Musicians want to make money, go play a club, and make a living
like everyone else.
We deserve to get paid.
There is a yet unnanmed service coming available that will Guarantee artists and composers a DIRECT profit from their talent. AND...they will join th ebandwagon of independent artists who will negotiate a fair rate for their products and the ASSCAP (mafia) RIAA and MPAA will die a nice death of their own making because they have eloquently revealed their TRUE nature as the Greedy, Self Serving, Slave Masters (i.e Gestapo Racketeers and extortionists) that they are. And everyone will have a TRUE license to listen, translate, morph etc.. music or movies as they see fit on any device or platform they wish without some NAZI Corporate Terrorists to worry about.
Now THAT is something to applaud. BYe bye RIAA, MPAA and ASSSSSSCAP. You WILL be eliminated from any concern in this industry going forward. Better save up your cash now while you still can. GREEDY LYING BA$TARD$. YUCK FU.
It's coming. it's just still in development.
matters? Clue >>> you are more likely to own up & take
ownership over "value" when you feel it & your audience affirms
your pleasant delusion! Entertain us & you WILL be paid ...
Relying on guarantees statutory or otherwise is sure to
disappoint ... Beats a REAL job though, NO?
profit organization that collects money from performances of
music and distributes it to composers, songwriters, and their
publishers. The songwriter is guaranteed 50% of that money,
and may get as much as 100% (if they're self-published). This
contrasts with the RIAA, which largely represents the interests of
the big four major labels by suing consumers, while the major
labels get fat off of money earned off artists' backs through the
use of convoluted contracts of epic proportions and inscrutable
accounting practices that could probably fry all of the world's
existing supercomputers were they to calculate the data.
Entitlement is entitlement ...
Greed kills.
I write music. I feel it is an extemely honorable way to earn a living while adding something of value to our culture ... Try living without what those of us who make music do.
Is the playng field comparable across the road?
What about satellite radio?
What about cable relevision and their mutliple genre-based music channels?
Or are the internet based music providers being overly targeted?
The fees imposed from all ends are getting out of hand and making it near impossible for anyone to make a profit without advertising an absurd amount. So the hobbyist internet broadcaster in pretty much screwed to high hell if this ends up touching internet broadcasting to effect its fees anymore.
These organizations are hurting a good avenue of advertising for their artists. And like i said us broadcasters/Providers dont owe the songwriters but the Artist singing/performing the song does. Collect your fee from the absurd royalties and fees us broadcasters already need to shell out and lobby the record companies and artist to get it. Ascep continually as i said before keeps going to the wrong place.
We arnt the ones you should look at to compensate you.
The public and culture at large has been ill served by the rapacious abuse of copyright laws by "Big Content". Vote for a Congressperson that puts public interest ahead of playing handmaiden for content industries!
While you say you dont want to hurt new opportunities that is exactly what this is doing. You dont see how this is adverse to anyone other then yourself. Look we didnt hire you to make the song period. The record company did and you signed a Contract with them into how you could benefit from said song.
The legality of Ascap is questionable to me in some ways. Your looking for compensation beyond your contractual compensation is what it boils down to. If you have a quarrel with what your paid it needs to be taken directly to the artists and the record company. Not someone like me that might be a hobbyist webcaster who is already charged an exorbitant amount of money.
I do think you need to be compensated but not by the lieks of me. You need to draw up better contracts with the RIAA and the Record Companies/Artists that you deal with because they are the ones making a HUGE profit off of your song when they perform it in Concert. For the small webcaster your crushing us and making it impossible for many of us to Operate.
You dont see a problem with that at all? Your a song write and you enter a Contract with the record company if Ascap really cared about you guys they'd help draw up proper contracts and sit in on these meetings with you and make sure your fairly compensated then and there not trying to extort money from other places who may not even make money off the song.
We arnt selling the song, We arnt out there giving it out and yet we are charged tons of money for it. Next Ascap will prolly try and charge us if the next car over can hear my radio. Greed is killing the music Industry and most of these organizations are not needed. Get yourself a lawyer and get fairly compensated by the people that should be compensating you The record labels , the RIAA and the Artists themselves that use your song.
We have nothing to do with that so this ASCAP orginization really needs to lay off. This is like if i invented the ice cream cone and then everytime someone saw an ice cream cone I'd want to be paid it doesnt work logically or ethically. You can complain about not being paid but that really isnt our fault. Its your own faul as well as ASCAP's and the greedy Record Labels and Artists who are clearly ripping you off from Pay you should of received for your work.
I dont however see that you deserve any compensation from people that play your music. This is tantamount to charging me for playing music for friends in my home because thats usually who i'm broadcasting to just friends etc. And yet I'm charged absurd fees for that already and your organization wants to add to that which they might as well just come to my house and rob me at this point because if they keep adding fees I'll be in debt from broadcasting.
The fact of the matter small websasters making little to no money from playing Music and we already pay quite alot of money (more then a radio station that isnt on the Web and can have more listeners (i can only broadcast to maybe 250 people tops where as a terrestrial station may broadcast to thousands....). Us webcasters already pay a good amount to be able to do this and charging us more is just wrong.
I make $0 from Webcasting/Broadcasting music and yet I'm already overcharged. Many places have needed to shut down because the fees are outrageous so as it is and if Ascap starts charging us more fees its going to be a problem.
The you owe us attitude is sickening. If you only got into writing music to make money then your in it for the wrong reasons. You say you dont want to hurt new methods of gettings things out there? Well when only places like clear channel etc exist to have an internet based service then you'll have won wont you of? Its becoming absurd and it will get to a point where only big businesses or the record companies are going to be able to afford a web presence and all us little guys are going to be screwed to hell.
Its not my fault you dont make money from your song writing so stop trying to punish me and others for it.
It's not up to use webcasters to pay your salary its up to the people that contract you to write a song or them and they should be the ones brought up on fees that they need to pay you not us. Either they start making a contract for you which gives you payment or you stop writing songs.
Is that simple enough for you? All your doing is taking money out of the hands of people that may not have money or be making a profit from it or are already overcharged so much that they can barely earn a profit or are losing money on such endeavors...
As set forth in the copyright law, two separate rights are at issue here - 1. the right for artists and record companies to be paid performance fees for the use of their recordings in webcasts, and, 2. the right of songwriters and music publishers to be paid for the use of their songs in webcasts.
Separate Federal Courts determined the fees to be paid for each right.
In the case of what webcasters were to pay artists and record companies, it was the webcasters that demanded a rate court hearing to determine the fee. It was a full blown court case that produced reams and reams of evidence from both sides setting forth their positions which lead the Judge determined the fees that would be paid. The case was narrowly focused on the issue of what was fair for artists and record companies to receive in return for the rights granted to them by the law.
A separate Judge ruled on the performance fees to be paid to songwriters and music publishers. Again, it was a full blown court case where the best lawyers in the land were engaged to present their cases on behalf of each side. The Judge's decision was strictly based on the law and the evidence presented.
The right parties were represented in these actions. No matter how you try to couch this thing as artists and record companies being responsible for having to pay fees due songwriters, there is no basis in law upon which you can make that assertion.
Webcaster are the users of music which embodies two rights, the rights of artists and record companies and the rights of songwriters and music publishers - and, under the law, webcasters are responsible for paying to use both rights. Try to play a recording with the song removed.
I've got a thought, why don't you get out of the webcasting business and into the restaurant business ... Maybe you can convince the guy that delivers your potatoes to pay the guy that delivers your meat. After all, meat and potatoes go together so why shouldn't one supplier be responsible for paying for both ...
That's it for me ... been a fun Sunday afternoon.
Get a lawyer to explain it to you from here.
If ASCAP had their wits about them they would do this instead of some BS that will land them in a lawsuit in a short while due to overcharging to many people and putting others livelihood at risk.
You can spew on and on that you deserve compensation all you want and I'll agree with you however its the method that your seeking compensation that is at fault no the fact that you are seeking compensation.
ASCAP should focus on getting you guys contracts with the People your writing songs for. And As i have said numerous times you should nto be paid beyond what the contractual scope says you should be and that is a contract you and the people your songwriting for need to agree to.
Stop whining about not being paid and take it to the people who SHOULD be paying you and stop trying to take other people's livelihood away to suit you own need to be paid. You accuse pirates of being tantamount to coming and taking your paycheck and yet you turn around and want to do the same thing to other people. Quite the hypocrite you are.
Okay go ahead and make the argument that they have already paid for the music. No, they may have paid for the private use of the song by buying a CD or they may have licensed the sound recording through RIAA or Sound Exchange, but this is a whole different ball of wax. What we are discussing now has nothing to do with big record labels or glamorous artists. This about the person that sits in a room and creates the song, the writer. The only way a writer can be paid for public performances of their songs (live, radio, TV or internet) is through their PRO and that is what ASCAP is. Now I do realize that there is a whole different stream of income for a song writer called mechanicals, but unless you've been under a rock for the past decade you know what has happened to that. Thanks to all of us that think that "burning" a CD is a victimless crime songwriters rely on performance royalties now more than ever for the bulk of their income. Once again we are talking about songwrtiters, not artists and performance royalties not mechanicals.
Okay the next argument will be that radio is charged less than the internet for the use of songs. To that I say lets go back to the beginning and remember the 5 ads to get to a song as compared to radio that can't do this. The internet has a huge potential for advertising income as compared to radio.
Why do internet companies have a problem paying for the music that increases their bottom line? Let say I own a small grocery store and have a sale on grapefruit in order to get customers to come in and buy coffee beans and chicken salad. I still have to pay someone for the grapefruit no matter how much chicken salad I sell. Why is this different with intellectual property and advertising?
ASCAP is not raking anyone over the coals, they are just saying that if you want to use music to increase your revenue you need to pay the songwriters. ASCAP is a member-owned, not-for-profit organization that is nearly a hundred years old. It's earliest members included such greats as Duke Ellington, Irving Berlin and John Philip Sousa. It's current members include Jay-Z, Dave Matthews, Stephen Schwartz and over 300,000 additional songwriters, composers, lyricists and music publishers.
If you are an internet company that has a problem with this there are a few quick solutions. The first and easiest is to stop using music on your site. The second is to stop using ASCAP member's music and write your own. Who knows maybe you'll be the next Cole Porter (another early ASCAP member) and have your music spread throughout the world on the internet. I have a feeling ASCAP will still be around to send you a check and I'll bet you'll cash it!
Just so you know, I am not an ASCAP member, just someone that loves songs and am hoping to hear another great one real soon, maybe on Launchcast...
This also begs the question of who actually owns the music.... They have no right to the music if they have signed a contract stating SO which I'm pretty sure your standard contract would negate the songwriters rights to collect money after they give rights of the written song over to the record label hence why proper contracts are important.
I dont think they should be paid off the backs of the broadcasters who try and make a little money and are already barely making a profit due to the outrageous fees they already have to pay. Why I ask are those fees not going to the song writers on top of it.
We already have to pay the artists royalties monty thats the kicker here you can argue burning a CD but we already pay royalties which are based on Listeners of when the song is played for each and every song that is played...
Most mainstream music isnt even worth the CD-R disk it takes to burn it on really its all turned to garbage at some point in the 90's and has continued to be garbage.... As far as those artists that put out their own music I buy it. I paid for In-Rainbows etc and I think The music Industry needs to reexamine their business model in general. They are like perpetually stuck in the 1980's business practice wise and use a crush or be crushed mentality.
Us smaller webcasters are screwed to High hell because alot of us dont make near as much money off advertising as you really think. I just think that for anyone to expect to perpetually be paid for music or an art form of any kind is somewhat ridiculous they should collect a flat fee up front from the people they are writing music for. Do you view that as a problem?
I mean if you break it down and they split the money collected evenly among their members they make chicken scratch. I could make more money doing a few web Banners and custom logos for sites then these people would get paid for an entire year and that would take me a month at most maybe even a couple to a few weeks...
The point is the comment the guy made sounds like they know what to expect we're going after them next (by them and they i mean the small webcasters....)
This is what i dont understand here.... They did this work under contract or signed a contract to give the song to a record company or artist for use.... Now the question is....Why arnt they paid then and there properly? If I as a freelance artist had gone out and did work i made a contract to be paid for my work as me and the company agree upon.... I cant go through and expect a royalty for every copy of the game they distribute unless it stipulates a royalty payment in my contract...
I wanna know what their contracts actually Entail...And if they arnt written up so they are paid properly by the record companies or artists they really need to get better people representing them to get them a better deal because frankly taking money from the webcasters isnt going to make anyone a whole lot of money with 300,000+ members...
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by benjaminstraight
July 13, 2008 2:37 PM PDT
- benjamin straight writes: Informative story.
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