ASCAP cuts new licensing deal with radio
Radio broadcasters now have agreements in place with both of the giant music licensing organizations. The latest agreement, totaling over 1.7 billion dollars, is with the American Society of Composers, Authors and Publishers (ASCAP), going back to 2001 and continuing through 2009. The new deal is similar to the one negotiated with Broadcast Music Inc. (BMI) last year (8/1/03 RBR Daily Epaper #150) in that fees are fixed, rather than being based on each station's advertising revenues. The new deal negotiated by ASCAP and the Radio Music License Committee (RMLC) has already gotten approval from a federal judge, as required under a long-standing legal settlement.
"We are very pleased with this agreement. Separating royalty fees payable from radio station revenues has been a goal of the RMLC for many years. With this agreement we have now accomplished that with both of the major performing rights organizations," said Keith Meehan, Executive Director of the RMLC.
Although negotiations stretched out to several years past the previous contract's expiration, ASCAP says it is pleased that the matter didn't end up in court. "Effective negotiation avoided the heavy cost of litigation for both sides and resulted in an agreement which can only serve to strengthen the longstanding partnership between America's leading creators of music and their most valuable customers," said ASCAP Sr. VP and Director of Licensing Vincent Candilora. We understand that the parties reached an agreement in principle back in April, but it took until this month, October, to work out all of the details. One item to note: The new agreement covers simultaneous Internet streaming by stations, as well as over-the-air broadcasting.
So, when does the next round of negotiations begin with BMI to replace its agreement that's due to expire the end of 2006? Meehan says those talks will likely begin in late 2005 or early 2006.
RBR observation:
We may be jumping the gun, but based on the last round of RMLC negotiations with BMI and ASCAP, it looks like music license fees should be a much less contentious issue going forward. Broadcasters have finally succeeded in ending the practice of basing music fees on their revenues, which rewarded (or punished) BMI and ASCAP for sales efforts that might have nothing to do with music programming - - but they still managed to reach financial terms which satisfied both music licensing organizations. And all this was accomplished without anyone storming out of the negotiations and heading to court. Kudos to everyone involved on all sides.
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