Federal Court Rules AOL, Yahoo, Real Must Pay ASCAP Music Licensing Fees; Could Run $100 Million

ASCAP is ballyhooing a federal court ruling today that AOL (NYSE: TWX), Yahoo (NSDQ: YHOO) and RealNetworks (NSDQ: RNWK) must pay higher licensing fees for streaming songs by its 320,000-plus songwriters, composers and music publishers. The license period covered by the ruling from U.S, District Court for the Southern District of New York, acting as a “rate” court, could go as far back as July 1, 2001 through Dec. 31, 2009. The amount owed based on a “reasonable” 2.5 percent of music-use-adjusted revenue could run the three companies up to $100 million, ASCAP claims. According to the court, AOL would owe roughly $5.9 million for 2006 while Yahoo would owe $6.76 million. But the revenue numbers are redacted so it’s difficult to tell what basis the court used to reach that number.

From a section of the ruling comparing the rate for the online sites to that paid by the television networks: “It is difficult to believe that music is that much less important to Applicants, whose visitors spend X (redacted) amount of their onsite time streaming music and who can select the music that is streamed, than it is to the television networks, whose viewers surely hear music for no greater percentage of their viewing time and have no choice of that music.”

The ruling also compares the fee to that the companies have agreed to pay major record companies, but those numbers, too, are redacted.

ASCAP has posted the pdfthe 153-page decision.