ASCAP Consent Decree Prevents Music Publisher User Discrimination

American Society of Composers, Authors and Publishers (“ASCAP”) is a performing rights organization.  ASCAP represents almost 50% of U.S. composers and music publishers in licensing and distributing royalties for the non-dramatic public performances of the composers’ and publishers’ copyrighted works.  Due to its power in the performance-rights market, ASCAP operates under a judicially administered consent decree. 

Some ASCAP members became concerned that new media companies, such as Pandora, were paying below-market rates for public performance licenses.  These ASCAP members forced ASCAP to modify its rules to permit the members to withdraw ASCAP’s right to license their works to new media companies, while retaining ASCAP’s right to license their works to other media companies.  These ASCAP members then directly licensed their works to the new media companies.  Pandora filed a lawsuit challenging ASCAP’s new partial withdrawal practice.

The Second Circuit Court of Appeals addressed the question of whether, under the ASCAP consent decree, publishers may withdraw from ASCAP their rights to license their works to certain new media music users (including Pandora) while continuing to license the same works to ASCAP for licensing to other users.

Continue reading “ASCAP Consent Decree Prevents Music Publisher User Discrimination”

DMX Cases Force ASCAP and BMI to Adjust Rates to Account for DMX’s Direct Licenses with Composers and Publishers

DMX, Inc. (DMX) provides background/foreground music to thousands of locations, such as retail stores, hotels, shopping centers, restaurants and other places open to the public.  This is not music transmitted over the radio, television or other public broadcast, but is a music service provided by DMX either by satellite or an on-location proprietary device.  DMX is a prominent provider for these services.  The American Society of Composers, Authors and Publishers (ASCAP) and Broadcast Music, Inc. (BMI) are performing rights organizations.  Most domestic copyrighted music in the U.S. is licensed through either ASCAP or BMI.  Both ASCAP and BMI are subject to consent decrees to prevent them from unlawfully monopolizing performing rights licensing.

In 2006, DMX introduced a direct licensing program to contract directly with individual composers and their publishers, bypassing ASCAP and BMI.  DMX sought to “break through the powerful status quo and pioneer a new licensing paradigm.”  (Opinion pdf page 13).  DMX requested licenses from both ASCAP and BMI that “carved-out,” or excluded, the direct license fees paid by DMX.  In separate cases with different judges, the district court sided with DMX and adopted DMX’s fee proposal.  Both ASCAP and BMI appealed.  Their cases were combined at the appellate level and the Second Circuit affirmed the district court opinions adopting DMX’s fee proposal.

Continue reading “DMX Cases Force ASCAP and BMI to Adjust Rates to Account for DMX’s Direct Licenses with Composers and Publishers”

ASCAP Challenge to Royalties for Mobi Offerings Rejected by Second Circuit

The American Society of Composers, Authors and Publishers (ASCAP) and MobiTV (Mobi) reached an impasse in their dispute about the royalty fees for a license for Mobi to publicly perform works controlled by ASCAP.  At the district court level, ASCAP claimed Mobi owed it $41 million in fees for the years 2003 to 2011.  Mobi calculated that it owed ASCAP $301,257.99 for fees due from November 2003 to July 2009.  The district court ruled that Mobi owed ASCAP $405,000 for fees from November 2003 through March 2010. 

The district court calculated its award using the amounts Mobi pays to cable television networks for content and the revenue Mobi receives from wireless carriers as the revenue base, i.e. the figure from which the royalties are calculated.  ASCAP appealed the case to the Second Circuit Court of Appeals, claiming that the district court should have calculated the royalty rate based on the retail revenues wireless carriers receive from sales to their customers.  The Second Circuit affirmed the district court’s decision.

Continue reading “ASCAP Challenge to Royalties for Mobi Offerings Rejected by Second Circuit”