Appeals Court Tells ASCAP: A Download Is Not A Performance

from the get-it-straight dept

A few years back, we covered the legal fight pitting ASCAP against Yahoo and RealNetworks, where the two internet companies were told to pay up based on a ridiculously arbitrary fee formula, including a totally made up multiplier called the "music-use-adjustment-fraction." The really scary part was that it calculated the revenue based on all of Yahoo's revenue. So, yes, even though Yahoo makes most of its revenue in ways that have nothing to do with music, its total revenue is used as part of the calculation. The one good thing that came out of the legal fight was the court making it clear to ASCAP that a download is not a performance, which requires a separate fee. As you may recall, ASCAP has been trying to claim just about anything involving music is a "public performance," in a weak attempt to get more cash.

Both sides appealed. Yahoo and RealNetworks appealed the crazy fee formula, and ASCAP appealed the claim that a download was not a public performance. The Second Circuit appeals court has now ruled and gone against ASCAP on both issues. It reaffirmed that a download is not a public performance (and thus, performance rights fees are not applicable) and rejected the bizarre calculation method used, as not "adequately supported" as being reasonable. A few highlights:

The fact that the statute defines performance in the audio-visual context as "show[ing]" the work or making it "audible" reinforces the conclusion that "to perform" a musical work entails contemporaneous perceptibility. ASCAP has provided no reason, and we can surmise none, why the statute would require a contemporaneously perceptible event in the context of an audio-visual work, but not in the context of a musical work.

The downloads at issue in this appeal are not musical performances that are contemporaneously perceived by the listener. They are simply transfers of electronic files containing digital copies from an on-line server to a local hard drive. The downloaded songs are not performed in any perceptible manner during the transfers; the user must take some further action to play the songs after they are downloaded. Because the electronic download itself involves no recitation, rendering, or playing of the musical work encoded in the digital transmission, we hold that such a download is not a performance of that work....

The court also scolds ASCAP for blatantly misreading other opinions on what constitutes a public performance and points out that ASCAP appears to "misread the definition of 'publicly,'" noting that ASCAP's definition of a public performance seems to "render superfluous" the term "a performance" in the Copyright Act. Ouch.

As for the royalty fees, the court is pretty clear that it doesn't buy the formula being used:

First, the district court did not adequately support the reasonableness of its method for measuring the value of the Internet Companies' music use. Second, the district court did not adequately support the reasonableness of the 2.5% royalty rate applied to the value of the Internet Companies' music use.

In other words, you don't just get to make up numbers out of nowhere.

That said, the court does say that it isn't necessarily against using such a "music-use-adjustment-fraction," it just needs the number to actually be supported. This is unfortunate, as it leads to improperly using non-music revenue as part of the calculation for how much should be paid for the music license. However, the court tries to deal with this by saying that the reasonable support needed would justify what the multiplier factor would be. Its main concern with the lower court's ruling was that it didn't take this into account and used a measure that made little sense (time spent listening to streams) which had little bearing on ad revenue:

The district court's MUAF accounts for the value of Yahoo!'s music use by using the amount of time that music is streamed. Streaming time, however, neither drives nor correlates with Yahoo!'s advertising revenue. The record evidence makes plain that Yahoo!'s advertising revenue model more accurately correlates with the number of times a particular page is accessed by users than to the duration of streaming time.

Filed Under: copyright, download, performance, royalties
Companies: ascap, realnetworks, yahoo

UK Pubs Can Get Huge Refunds From Music Collection Group After Overcharging

from the well-that's-a-surprise dept

After seeing so many stories of various collection and performance licensing groups being able to boost their rates and expand their coverage over the past few years, it's nice to see at least some pushback. IanVisits points out that, over in the UK, the Phonographic Performance Ltd (PPL) has lost a lawsuit which claimed it had seriously overcharged. So now pubs, bars and restaurants can start claiming refunds. Of course, a bit annoyingly, these venues have to proactively make a claim. Contrast that to demands from such collection societies about how you automatically have to pay up for a license... The article also notes that the ruling requires new rates, with some pubs and restaurants expecting the money they have to pay to be cut in half. Nice to see that more venues might be comfortable playing and promoting music again...

Filed Under: licensing, performance, uk
Companies: ppl

BMI Sues T-Mobile, Claims It Needs To Pay Up Over Ringback Tones

from the are-ringbacks-a-public-performance? dept

I'm still in the camp of folks who doesn't quite understand "ringback tones" -- the ugly stepchild of ringtones, where it's not what music your phone plays, but what music a caller hears when they call you and are waiting for you to pick up. While ringbacks have been a big deal in Asia, they're still a relatively small market in the US. But, that's not going to stop collections societies from demanding cash, of course. mike allen alerts us to the news that BMI has sued T-Mobile over its ringback tones. Of course, here's the thing: a court has already established that ringtones are not performances, so are ringback tones performances? Or, of course, T-Mobile could just ban the use of any BMI songs as ringbacks, and then see how those artists feel about how BMI is "protecting" their interests...

Filed Under: performance, ringback tones, ringtones
Companies: bmi, t-mobile

PRS's Latest Trick: Demanding Money From Shop Assistant Who Was Singing At Work

from the performance-fees dept

Sometimes, these collection societies write the jokes themselves, it seems. PRS, the music collection society in the UK, famous for going way over the line in demanding money from people (remember the time it demanded a woman pay up for playing music for her horses? Or how it calls small businesses and if they hear any music in the background, demand payment?), has done it again. It threatened a shop assistant for singing out loud (public performance!) while stacking the grocery shelves, demanding she pay £1,000 for the privilege. Of course, why was she singing? Because PRS had already threatened the owner for having a radio -- so he got rid of the radio.

Of course, as with the horse debacle, once PRS realized the PR nightmare it had created for itself, it apologized (and sent some flowers). But, that hardly makes the situation better. Why is PRS demanding such things in the first place? Given the long trail of similar examples, this isn't just some random one-off accident. It's basically how PRS operates. And that's because it's structured its business so that its "investigators" aren't really "investigators" at all, but sales people. They have every incentive to get as many companies to pay up as possible, no matter if there's any real performance at issue.

On top of that, the very fact that PRS forced this shopowner to take away his radio should show how backwards and braindead PRS's strategy is. The radio in the shop isn't a "public performance." It's not the reason people go to the shop. But it did help promote the musicians PRS supposedly represents. Not any more. Musicians in the UK should be furious at PRS for making it more difficult to get their music heard, let alone for threatening someone for singing while stocking the shelves.

Filed Under: collections, music, performance, singing, uk
Companies: prs

Dutch Collection Society Backs Down Slightly On Video Embeds

from the but-not-really dept

Dennis Laumen alerts us to an update on the story concerning Dutch music collection society Buma/Stemra's plan to charge bloggers for embedding YouTube videos on their site. After the story got lots of publicity, Buma appears to have backed down ever so slightly, saying that "amateur" bloggers are off the hook. But, the definition of "amateur" is basically only if you don't have any ads. Put up some Google AdSense... and suddenly you're a "pro" who has to pay up.

Filed Under: collection society, embeds, netherlands, performance, youtube videos
Companies: buma/stemra

Dutch Collection Society Looks To Charge Bloggers For Embedding YouTube Videos

from the pay-up...-again dept

Over the past year, we've noticed an explosion in ridiculous attempts by music collection societies (often totally clueless about technology) to extend their ability to collect for positively ridiculous things (while also looking to significantly increase their collection rates). The latest, sent in by Dennis Laumen, is that the Dutch collection society, Buma/Stemra, is claiming that it's going to start charging bloggers 130 euros for every 6 videos they embed. This is, of course, technologically clueless. The embedding of a video doesn't change the fact that it's actually playing from and hosted at the original site (such as YouTube). All embedding does is allow the video to appear via the other page, even though, technically, it's all still happening at its original location. Claiming that this is somehow a "new" publication of the content is technologically incorrect.

This is somewhat similar to ASCAP's recent technologically clueless claim that embedding YouTube videos should count as a public performance (along with its other recent claims that iTunes 30-second previews and your mobile phone ringtones should also be counted as public performances). You sort of get the feeling that many of these collection societies came to the conclusion about two years ago that they're functionally obsolete, and rather than adapt to the times, they've all agreed to the same basic principle of going out in a blaze of glory. They're trying to vastly increase rates while covering any and ever attempt to use music in any way, bleeding everyone dry while making it that much more difficult for up-and-coming acts to get heard (since venues that promote them can't pay the crazy rates) and (even better) setting up their payout mechanisms to massively favor the top acts.

For the most part, these collection societies are simply being greedy, without putting a single thought towards actually helping composers and songwriters. They're looking for every single penny they could possibly collect today, and ignoring the medium and long-term impact of trying to charge for any sort of promotional behavior.

Filed Under: collection society, embeds, netherlands, performance, youtube videos
Companies: buma/stemra

Can You Plagiarize A Play You Licensed To Perform? The Urinetown Saga...

from the you-have-got-to-be-kidding dept

A few years back I got to see the musical Urinetown when it came through San Francisco. It's really very funny, and if you happen to live somewhere that it's playing, I'd recommend you go check it out. However, apparently, in going to watch it in some places, you might be seeing an "infringing" version -- even if it's been properly licensed. William Patry lays out some of the details behind the latest bizarre situation in the world of intellectual property rights, where the folks behind Urinetown's Broadway production accused those behind Chicago's production of plagiarism as well as violations of copyright and trademark law. It wasn't because the folks in Chicago hadn't licensed the work. In fact, the "Chicago team" licensed both the script and the music to perform. Apparently, though, that wasn't enough. The folks in NY said the folks in Chicago had "blatantly" plagiarized and copied the NY production in producing their own version. This is the point at which it might be worth pointing out that of course they copied the NY production. That's because they were putting on the same damn play. Apparently, the folks in NY thought that even with the script and the music, the Chicago version needed to look different than the NY version, which seems rather ridiculous. All of this came out in a lawsuit filed by the people in Chicago against their accusers in NY (who even demanded that the Chicago team "decline and remit" the awards it had won for its production). Unfortunately, the court tossed out the case, as the folks in Chicago apparently sued the wrong party in NY (whoops). So, perhaps there will be a follow up with the correct party being sued. In the meantime, it does seem rather ironic that a play about taking laws to ridiculous extremes now faces just such a battle. Perhaps it'll give the playwright an idea for his next play.

Filed Under: copyright, performance, trademark, urinetown