[Fmpro] Another one bites the dust

[James Ryan]

Judge: No Performance Right In Downloads
April 25, 2007 - Publishing | Legal and Management

By Susan Butler, N.Y.

Several sources tell Billboard.biz that a federal court has ruled that
there is no performance right for publishers and songwriters in a
download. The decision came during a proceeding to determine royalty
rates between ASCAP and digital services AOL, RealNetworks and Yahoo!.

Currently, digital services pay a performance royalty for streams and
pay a digital phonorecord delivery (DPD) royalty, which is akin to a
mechanical royalty, for downloads. The performance license covers the
right to "publicly perform" the recorded composition, while the DPD
license covers the right to "reproduce" a copy of a recorded song and
to "distribute" it digitally.

But there's a distinct difference between digital performance and DPD
licenses. The former are negotiable, so publishers have the right to
say "no" to a license request. The latter are often compulsory, so
publishers must grant the license if the song has been previously
recorded and released in the United States. Requiring both licenses
for one type of use could increase the cost to companies that want to
offer downloads.

After ASCAP proposed a performance royalty rate that included a fee
for downloads, the digital services filed a motion for summary
judgment asking Judge William Connor to declare that there is no
performance right in a download. That request prompted several groups
to file amicus (friend of the court) briefs, including the National
Music Publishers' Assn, the RIAA and the Digital Media Assn.

The decision, if not reversed on appeal, could detrimentally affect
future performance fees as more television shows become available for
downloading over the Internet (which would not require payment of a
royalty) and less available for re-broadcasts (which would require
payment of a royalty).

Check back for an updated report. Billboard.biz expects to obtain a
copy of the decision soon.

http://www.billboard.biz/bbbiz/content_display/industry/
e3i72befdb4414929e21e3d455374b9592f

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