On Oct. 31, 2014, the CRB, after a de novo review of its previous setting of the minimum
annual fee for noncommercial webcasters at $500 for 2006-2010 (the de novo review being
necessitated by the D.C. Circuit’s ruling that the judges had not been validly appointed at the
time they issued the initial determination), announced its final determination upholding the
validity and application of the $500 minimum fee for noncommercial webcasters for the
licensing period 2006 through 2010.^3210
In U.S. v. American Society of Composers, Authors and Publishers,^3211 the U.S. District
Court for the Southern District of New York set the licensing rates and terms that AOL,
RealNetworks, and Yahoo! would have to pay in order to publicly perform ASCAP songs over
the Internet. The three companies had applied to ASCAP for a blanket license to perform
ASCAP-reparatory music over the Internet, but were unable to reach an agreement, so ASCAP
petitioned the court for a determination of reasonable royalty rates. Although ASCAP initially
claimed that royalty rates should apply to both streaming music and downloads, an earlier
proceeding determined that royalty rates should apply only to streaming music because
downloads invoke the copyright holder’s reproduction right, not the public performance right.^3212
The final rates involved a three-step computation, starting with a calculation of each company’s
domestic revenue. Because AOL and Yahoo! offer a variety of services, the domestic revenue
figure is then reduced by a “music-use-adjustment” fraction (the total number of hours music is
streamed to users by that company, divided by the total number of hours that visitors utilize the
site, as determined by the third-party traffic measurement firm comScore Media Metrix).
Finally, a 2.5% royalty rate is applied to the remaining revenue figure, producing the royalty
rate.^3213
(c) New Subscription ServicesOn Feb. 12, 2001, the Copyright Office announced the initiation of the six-month
statutory voluntary negotiation period for determining reasonable rates and terms for the
statutory license for new subscription services.^3214 No agreements were reached. After the close
of the negotiation period, the Copyright Office received petitions requesting that a CARP be
convened to establish terms and rates for the statutory license covering new subscription
services. The petitioners also requested that the Copyright Office consolidate the proceeding for
new subscription services with the proceeding for pre-existing satellite digital audio radio
services and pre-existing subscription services.^3215 As discussed in the previous subsection, in
(^3210) 79 Fed. Reg. 64669 (Oct. 31, 2014).
(^3211) 559 F. Supp. 2d 332 (S.D.N.Y. 2008).
(^3212) U.S. v. American Society of Composers, Authors and Publishers, 485 F. Supp. 2d 438 (S.D.N.Y. 2007); “Court
Sets Music Royalty Rate, Terms Through 2009 for Three Online Services,” BNA’s Electronic Commerce &
Law Report (May 7, 2008) at 623.
(^3213) “Court Sets Music Royalty Rate, Terms Through 2009 for Three Online Services,” BNA’s Electronic
Commerce & Law Report (May 7, 2008) at 623-4.
(^3214) 66 Fed. Reg. 9881 (Feb. 12, 2001).
(^3215) 66 Fed. Reg. 58180 (Nov. 20, 2001).