Perhaps You Could Stream Those Back Royalties Over the Internet as Well

Seems AOL and Yahoo were a bit off on their estimates of the back royalties they owe music composers, writers and publishers for streaming their work over the Internet. The two companies had proposed paying just $632,879 and $889,402, respectively, in 2006 royalites to the American Society of Composers, Authors and Publishers. Yesterday, a federal court ruled that what the two really should pay is $5.95 million and $6.76 million, respectively.

Under the terms of the court’s order (PDF), AOL (TWX), Yahoo (YHOO) and RealNetworks (RNWK) as well must pay ASCAP
2.5% of their streamed-music revenues between 2002 and 2009. That could amount to as much as $100 million for ASCAP and its membership.

Quite a windfall and one that ASCAP was quick to ballyhoo. “The Court’s finding represents a major step toward proper valuation of the music contributions of songwriters, composers and publishers to these types of online businesses–many of which have built much of their success on the foundation of the creative works of others,” said Marilyn Bergman, president of ASCAP. “It is critical that these organizations share a reasonable portion of their sizable revenues with those of us whose content attracts audiences and, ultimately, helps to make their businesses viable. This decision will go a long way toward protecting the ability of songwriters and composers to be compensated fairly as the use of musical works online continues to grow.”