Turns out that AOL, RealNetworks and Yahoo! gotta pay license fees to music performing rights organization ASCAP for streaming music by its members, or so said a federal court judge in New York this week.
The District Court judge instigated a rate-setting proceeding where the three services can obtain a non-exclusive blanket license from ASCAP for unlimited performances of all songs in the PRO's repertoire through Dec. 31, 2009. The fee for the license is 2.5% of the service's "music-use-adjusted revenue."
"This historic decision, for the first time, provides a clear framework for how the online use of musical works should be appropriately valued," said ASCAP CEO John LoFrumento. "This decision also provides clear validation of the flexibility and applicability of the ASCAP blanket license model relative to the use of musical works on the Internet - something the court itself specifically noted in its written decision."
According to Billboard, “music-use-adjusted revenue is determined by multiplying the total revenue of the licensed business unit (i.e., the digital service's business unit that streams music or other content that includes music), less customary deductions for advertising sales commissions and traffic acquisition costs, by a music-use adjustment fraction. That fraction is determined by using as a numerator the total number of hours music is streamed to users by the service (as currently measured by each service) and by using as a denominator the total number of hours of use of the service's Web site (as measured by comScore or other means approved by the court).”
My head hurts now…
(Hey, I wonder how many people streaming gladiator metal legend Thor last year? Hmmmmm... Look at the photo above and guess....)
Billboard.com: Judge Sets ASCAP Streaming Fees