The U.S. District Court for the Southern District of New York ruled late Wednesday that AOL, Yahoo and RealNetworks must pay higher licensing fees to ASCAP. The net companies had asked the court to set the rate based on revenue directly attributable to music uses. Instead, the decision sets a formula based on gross website revenue multiplied by the portion of website activity that is music-intensive. Some estimates put the back payments due as high as $100 Million.
The executive director of DiMA, a trade group representing the net broadcasters, Jonathan Potter, issued a statement:
"DiMA agrees that Internet portals and multi-faceted online services should pay fair royalties to 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, not simply on revenue directly attributable to music usage."
"DiMA is studying the 153-page decision, and at this point the only certainty is that the court's complex rate formula will require several weeks of additional consideration, including perhaps additional court hearings, before its impact on the parties (Yahoo!, AOL and RealNetworks) and other ASCAP licensees is known.”
A copy of the ruling can be found here.
