AOL, RealNetworks and Yahoo! Music Licensing Fees Decision

The ASCAP press release (Federal Court Decides License Fees to Be Paid to ASCAP by AOL, RealNetworks and Yahoo!) is pretty strident:

The United States District Court for the Southern District of New York today made public a decision in the proceeding to determine reasonable license fees to be paid to the American Society of Composers, Authors and Publishers (ASCAP) by AOL (Time Warner Inc., NYSE: TWX), RealNetworks Inc. (Nasdaq: RNWK) and Yahoo! Inc. (Nasdaq: YHOO) for their online performance of musical works.

The decision covers license fees for periods starting as far back as July 1, 2002, and continuing through December 31, 2009, for the performance of musical works in the ASCAP repertory by AOL, RealNetworks and Yahoo! Based on the formula established by the Court, the total payments to be made to ASCAP and its membership by these three services for that full period could reach $100 million. The Court’s comprehensive 153 page decision was based on extensive evidence presented by both sides in the case regarding the online performance of musical works by AOL, RealNetworks and Yahoo!

Of course, no such award is yet even in the offing. The decision is about process and, after 152 pages, one finds that instead of the ASCAP’s proposed 3% of revenues less adjustments, the court believes that 2.5% is a more appropriate basis. However, what’s really enlightening is this look at the process for resolving fee disputes when a state-sanctioned monopoly provider (ASCAP) is involved. A fascinating look.

Also note that this comes one year after ASCAP lost (to the same set of participants) what the LATimes’ blog referred to as its “double-dip” in digital downloads in this decision

Following extensive discovery, the parties cross-moved for partial summary judgment on the issue of whether the downloading of a digital music file embodying a particular song constitutes a “public performance” of that song within the meaning of the United States Copyright Act, 17 USC § 101 et seq. Having reviewed the materials submitted by the parties, as well as the numerous briefs of the amici curiae, we conclude it does not.