Internet Radio Royalty Rates Are Set…

Thursday, May, 1, 2008 by Mel Phillips.

A federal judge in a U.S. District Court in Manhattan has decided that any and all music used in “streaming” or “heard as it is retrieved from the Internet” will be taxed 2.5% between the years 2002 and 2009, The Wall Street Journal  reports.  As a result of that ruling Yahoo, Time Warner’s AOL and RealNetworks could collectively owe up to $100 million to the American Society of Composers Authors and Publishers a.k.a. ASCAP.  If you’re wondering about the other major music publisher, Broadcast Music Incorporated or BMI, they have a licensing deal with online services already in existence…

This ruling doesn’t affect the different rates for Internet Radio or broadcasts that play songs in an order the user has no control over or on-demand services where users choose the songs they want to hear.  It does not affect song downloads.  This deal is strictly for streaming.  It does mean this - online broadcasters will pay more than terrestrial radio for playing music.  Terrestrial radio pays ASCAP 2% of their revenue for music licensing - online now pays 2.5%.  Why?  Because, according to the court, online broadcasters play more songs per hour than terrestrial radio does, that’s why.  Terrestrial radio also gets a pass on paying royalties to musical performers and record labels through SoundExchange, something online radio is taxed on…

Whether or not, some online radio stations will now fold is in question but ASCAP is happy about this decision.  ASCAP Chief Executive John A. LoFrumento says, “the judge made it very simple and efficient to license music for the online world.”   But also, I might add, more costly for internet radio…

For a history of the long-lasting feud between ASCAP and BMI, read today’s “Commentary“…

10 Timeline Memories:

1. 1822]  Boston’s ‘Papa John’:  John Phillips becomes Boston’s first Mayor…
2. 1931]  Happy 77th Birthday Empire:  It was May 1, 1931 when President Herbert Hoover pressed a button in Washington officially opening the tallest building in New York City and the U.S., The Empire State Building.  Here’s the view from the top today…
3. 1939]  Batman Comics:  Batman is born as a comic hero.  TV and movies will soon follow.  This comic collector  claims he’s got the original issue of “Batman”…
4. 1941]  Oats shaped like “O’s“:  General Mills introduces Cheerios and in the 50s, the ‘Cheerios Kid“…
5. 1951]  Debuting on this date:  Mickey Mantle hits his first home run in an 8-3 Yankee loss in Chicago.  Pitcher Randy Gumpert is the victim…1952]  Mama Potato Head gives birth to the son who will become Mr. Potato Head…1957]  Larry King  broadcasts his first radio show…1961]  The first U.S. airplane (a National Airlines jet)  is hijacked  to Cuba…
6. 1960]  U-2 without Bono:  The Soviet Union shoots down an American U-2 spy plane and captures pilot Frances Gary Powers who will later stand trial  in Russia…
7. 1967]   Wedding Bells:  Elvis Presley  and Priscilla Beaulieu rock down the aisle.  They will divorce in 1973…
8. 1989]  IncogMichael:  Police in California are called in to what they think is a robbery in progress at a jewelry store only to find Michael Jackson  shopping in a disguise…
9. 1991]  Oh No - not again:  44-year old Texas pitcher Nolan Ryan  pitches his 7th no-hitter vs. Toronto.  No other pitcher in baseball history is even close to reaching that mark.  No one ever will be either…
10. 2003]  Dream on:  President George W. Bush lands in a jet on the aircraft carrier USS Lincoln off the California coast and in a speech to the nation declares that major combat in Iraq is over…

Music Memories:

• 1965]  Released on this date:  “Back In My Arms Again” - Supremes…1971]  “Brown Sugar” - Rolling Stones…
• 1974]  Live from the White House:  The Carpenters sing for President Richard Nixon and West German Chancellor Willy Brandt.  This is one of the songs  (not from the White House) that they sang…

Commentary:

The bad blood between the two publishing giants ASCAP and BMI started in 1939 when the latter had the audacity to start a music publishing company.  ASCAP was the only music publisher for 25 years, having started in 1914 before BMI came along.  Competition was reason number one for the beginning of the feud.  Reason number two was that BMI was founded by Radio executives and reason number three was the type of music published by BMI.  ASCAP was your grandfather’s music publisher at its inception, publishing waltzes, ballads and dirges for 25 years but BMI dared to be different, publishing Rock and Roll, something ASCAP wouldn’t touch.  Wikipedia has a good comparison of the two music publishers, which I’ve already linked.  It’s worthy of reading…Congratulations to John R. Gambling for being rehired as morning man at WOR.  The firing of John at WOR ended a 75-year string of Gambling’s at that station.  After his firing he was immediately hired by WABC.  The good news is that he’s back at WOR as David Hinckley reports in his New York Daily News column …

“Happy Birthday…happy birthday”:

Wes Welker (27), Curtis Martin (35), Tim McGraw (41), Steve Cauthen (48), Ray Parker Jr. (54), Rita Coolidge (63), Judy Collins (69), Sonny James (79) and Scott Carpenter (83)… 

Timeline Countdown:  One day until Holocaust Remembrance Day, 2 days until the Kentucky Derby, 9 days until Mother’s Day and 25 days until Memorial Day… 

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