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ASCAP lose twice in appeal court digital royalty hearing

By | Published on Thursday 30 September 2010

A federal court in the US has delivered two rulings in favour of digital music providers in the States to the detriment of publishing collecting society ASCAP.

The first related as to whether a performance royalty was due on downloads in addition to the mechanical royalty already paid to publishers and songwriters. It’s an important distinction in the US because performance royalties and mechanical royalties are handled by different collecting societies there, whereas in the UK it all falls under the banner of PRS For Music.

To be honest, it is hard to see why a performance royalty should be paid on downloads, but ASCAP had a good go at trying to argue that it should. But the organisation failed to convince judges at the Second Circuit Court Of Appeals who, backing an earlier judgement in a lower court, ruled this week that the downloading of music online does not constitute a “public performance”.

The other ruling related to the royalties paid by Yahoo! and such like on streaming services, where a performance royalty is due. That royalty structure is also based on an earlier lower court ruling, but on that count the lower court got it wrong, the appeal judges said.

The court said it felt the system was currently unfair on digital providers like Yahoo! because it failed to account for their business models, and the way royalties were calculated were “unreasonable” and “imprecise”. The appeals court sent the whole thing back to the lower court asking that it rethinks the way streaming royalties work.



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