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ASCAP loses its double dip

A federal judge in New York ruled today  that ASCAP -- one of the three major groups collecting royalties for songwriters from radio stations, bars and other music-playing venues -- had no right to demand fees from online music stores and services that offer digital downloads. The case, which began several years ago, started with a dispute between three companies offering subscription music services (AOL, Yahoo and RealNetworks) and ASCAP over what the companies viewed as a double-dip. Songwriters get paid performance royalties (which ASCAP collects) when their tunes are played in public. And they are entitled to mechanical royalties (which the Harry Fox Agency collects) when their songs are pressed onto CDs. Although downloaded songs seem more like CDs than radio broadcasts, both Harry Fox and ASCAP argued that they should be paid royalties by AOL, Yahoo and RealNetworks when their subscribers downloaded tracks onto their PCs.

The court fight prompted a rare show of solidarity by the Consumer Electronics Assn. and the RIAA, both of which sided with the online companies. U.S. District Judge William C. Conner came to the seemingly obvious conclusion that a silent download could in no way be construed as a "performance," hence ASCAP was not entitled to any piece of the digital music industry's downloading action. This may be simply a temporary setback for the society: I cling to the belief that music fans will abandon downloads in favor of on-demand streams (on which songwriters are entitled to royalties) once they have ubiquitous Internet connections and the right devices. Of course, that may not happen until Steve Jobs starts showing some love for subscription services.

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Times editorial writer Jon Healey pens opinion pieces about a variety of business issues, and blogs about technologies that are changing the entertainment industry's business model.

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