Court Lowers Songwriters/Publisher Performance Royalty

| 03/14/2012

A recent court ruling between the Radio Music License Committee (RMLC) and ASCAP has reset radio fees dating back from Jan. 1, 2010 until Dec. 31, 2016. After two years of litigation, the Federal District Court for the Southern District of New York approved a settlement concerning the fees payable by radio stations for the 8.5 million musical works represented by ASCAP and its 425,000 songwriter, composer and publisher members. According to the RMLC, “The immediate impact of this settlement was reflected in ASCAP’s January 2012 billing statements that reflected a fee decrease of about 30% for the vast majority of radio stations across the country.”

According to reports from the RMLC, the new ruling will decrease annual fees payable to ASCAP for 2012 by about $80 million as compared with rates at the close of 2009. Both sides were unable to reach agreement on new rates starting in 2010 which is why the court settlement will be retroactive to that time.

License fees under the previous deal were about 3% of industry revenues for each of ASCAP and BMI, according to the RMLC. The new settlement returns to a revenue based fee at about 1.7% of revenue.

Part of the agreement includes, “A $75 million industry fee credit against 2010-2011 industry payments, to be credited in annual installments of $15 million each over 2012-2016 (this, in addition to the industry’s retention of $40 million in fee reductions that had been ordered by the same Court at the interim fee stage of litigation in calendar year 2010).”

According to RMLC Executive Director Bill Velez the status of the BMI licensing agreement is still undecided and in litigation.

The RMLC is a 501 (c)(6) non-profit Tennessee corporation based in Nashville. Its Directors are made up of station owners and management serve without compensation. A complete list of its objectives and goals can be found here.

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Journalist, entrepreneur, tech-a-phile, MusicRow magazine founder, lives in Nashville, TN. Twitter him @davidmross or read his music industry reports at Nekst.biz Also circle him on Google+.

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