Online music stores against music publishers efforts to raise the royalty rate

Digital music downloads shouldn’t be considered “public performances” and therefore no additional royalties should be paid, the Digital Media Association (DiMA*) advises to federal court counter to claims “by the American Society of Composers, Authors and Publishers (ASCAP**) that digital music downloads are “public performances” and should, therefore, be subject to a public performance license and royalty”. (DiMa)

“ASCAP’s assertion in federal court that digital distributions of music and video are also public performances confounds legal, business and technological reality,” said Jonathan Potter, DiMA’s Executive Director. “For a decade ASCAP and BMI have successfully preyed on less-confident or underfinanced companies that were willing to pay double-dip royalties. Now, however, we are confident that a judge will finally end this travesty… ASCAP and BMI claim that a download or even its “transmission” to a consumer – even if the media file is never opened and made audible or visually perceptible to the recipient – is a “public performance” that justifies an additional license and royalty. “This sophistry is based in fear – that ASCAP and BMI will have no service to offer publishers and songwriters if direct-to-consumer distribution substantially eliminates subscription or advertiser-based performance media,” stated Potter.

Back in 2005 ASCAP had asked the court to set reasonable royalties “for online music performances made by AOL, Yahoo! and RealNetworks” and is now pushing for what DiMa’s Director calls double-dipping. The trial will begin this May. If ASCAP wins the prices of legal downloads will rise as the online vendors will have to pay additional fee for every download as a public performance as well.