A Federal Court found today that AOL, Real Networks and Yahoo owe $100million to songwriters and composers as back payment for streaming music online.
The court ruled on a request from the American Society of Composers, Authors and Publishers to establish reasonable compensation for the playing of their works. Notably ASCAP represents writers and composers and not the record industry, so the request for money is on top of any existing licensing agreements with the RIAA and its constituent members.
The court found that “reasonable license fees” are owing from AOL, RealNetworks, and Yahoo for the music streamed and distributed from their sites, retrospective to 2002, at a cost ASCAP counts at $100 million.
Unsurprisingly, ASCAP was happy with the decision:
“The Court’s finding represents a major step toward proper valuation of the music contributions of songwriters, composers and publishers to these types of online businesses – many of which have built much of their success on the foundation of the creative works of others,” said ASCAP President and Chairman and Academy Award-winning lyricist, Marilyn Bergman. “It is critical that these organizations share a reasonable portion of their sizable revenues with those of us whose content attracts audiences and, ultimately, helps to make their businesses viable. This decision will go a long way toward protecting the ability of songwriters and composers to be compensated fairly as the use of musical works online continues to grow.”
The Digital Media Association, a trade organization representing online streaming and music providers, said that the are not opposed to compensating composers and writers, but object to the model imposed by the court, with demands companies hand over 2.5% in part of all revenue as compensation, not just revenue from the music services themselves.
(in part via CNet)
Unlike recordng artists – composers may not be profiting directly from the songs being played via the Internet
Since they are behind the scenes – they may not be getting viral publicity from their work becoming popular over the Internet
They may not even be credited in the Meta Data
a $100 million bill is nothing compared to the amount of cash they brought in with a high volume of traffic consuming it. i’d say they got it at firesale prices.
The music industry sucks so hard, to many groups have their hands out, it’s ridiculous. They need to shut down the RIAA & ASCAP and start over.
-Jeff
Justr finished to read the 156 pages. Thanks a lot. I spent such a good time. F*** dudes from music industry, you will just go on doing sh… for ever.
BTW @andrew I agree this is not such a big bill.
Companies like these guys can absorb this bullshit (note that a senior Time-Warner exec is on the board of ASCAP). Smaller outfits like Pandora are pretty much doomed. Nicely done ASCAP, you’re screwing the people you represent long-term for a short-term gain. Somehow. I don’t really see the “gain” here, but money is money, right? Lord knows Mariah Carey needs more.
This is a case to keep webcasting confined to standalone companies like Pandora and outside of larger companies like Yahoo and AOL. Microsoft distributes Pandora via MSN, but Pandora’s bill is based solely on its own revenues. On the other hand AOL owns its webcasting unit and pays based on all of its revenues. It costs more to do webcasting as part of a big company than a small one.
And webcasting is the *cheapest* way to do licensed music on the internet. It just sucks to do any kind of business with music licensing and nobody but Apple has ever come out a winner by cutting deals with the industry.
Okay, if that’s the case then Google owns us all like 100 billion, the government doesn’t stick up for tech companies like it should, while it will bail out companies that destroyed the life savings of unsuspecting people who were told their entire lives that you can not go wrong with real estate investments. I didn’t see this coming most likely because it’s stupid. You mean the RIAA isn’t paying the composers? Where is my Subscription to Rhapsody over Sonos go??
so how much do p2p networks owe? their 1st born, lol,….this is the biggest joke to ever hit the net. fyi “old” music industry, your day has come and gone..after all if air jordan can get old and outdated anything can, including that old lame business model that you guys are trying to hold on to until the bitter end… YOU CANT SUE YOUR WAY OUT OF THIS ONE…ITS 2008 NOT 1988!
Not particularly unfair…
The cable companies and ISPs should also pay the bill because they allow streaming of the music as well, according to the judge’s logic.
Yahooooooooo!
we all know their gonna appeal until the cows come home.
$100 million is a small price to pay for the traffic driven to the websites during that time frame for advertising profits, however, this really deters smaller startups to bring new ideas to the streaming media industry.
They all knew it was coming sooner or later. Next up, magazine publishers vs. Scribd.
“It is critical that these organizations share a reasonable portion of their sizable revenues with those of us whose content attracts audiences and, ultimately, helps to make their businesses viable.”
Facebook owes me some money
This is just another step in the legitimization of a successful online music industry. I’m watching out for similar deals from YouTube, Google and others. It’s a fair price and artists deserve the compensation.
I don’t think it’ll deter startups – In fact, it’ll sort the wheat from the chaff. The more services like this realize that they have a responsibility to artists, then the more responsibility they’ll have to take in designing their company and making viable business models. That will only help the whole creative enterprise in the long run.
I’m a little surprised that the big boys didn’t have licensing in place to begin with. Maybe they knew they’d get off cheap so it’s better to ask for forgiveness than permission.
Happy to pay the artists. F the labels.
Seriously, the transformation of music in the next 10 years should be cool.
Bands are born out of a love to play music, tour their collective ass off, seel a ton of T Shirts and gate and release music via the Internet on their own terms as a loss leader.
I think the quality of music will actually go up.
It’s interesting to see how people assume $100M is chump change without any data.
The only companies that make money by selling/streaming music are the record labels. Even Apple loses money on track sales, and they use the iTunes to fuel their iPod business, where they have huge profit margins.
It’s unexplicable to go after internet businesses trying to bring a high quality and legal service to consumers while trying to stay competitive with giants like Apple. All of the revenue (and then some) already goes to the record labels, so that’s who the ASCAP people should have a beef with.
-nik