The Radio Music License Committee and the American Society of Composers, Authors and Publishers hammered out a new music licensing agreement early in December 2011, setting new terms retroactive to 2010 and running through 2016. The agreement has now gotten blessings from a federal judge.
The agreement was being reviewed in the Federal District Court for the Southern District of New York, where Judge Denise L. Cote signed off on it.
Describing the new agreement, RMLC stated, “The radio industry had faced a serious challenge in terms of restoring reasonable license fee levels during difficult economic times. License fees had ballooned to some 3% of industry revenues for each of ASCAP and BMI in the post-2008 environment. The settlement approved by the court today effectively rolls back annual industry fees payable to ASCAP by more than $80 million for 2012 (as against where they stood at the end of the prior license in 2009) and provides for a return to a revenue-based fee structure at a level of 1.7% of revenue. In addition, the new agreement covers (at the same 1.7% rate) the range of new media platforms in which the radio industry is increasingly engaged.”
The deal brings together about 10,000 radio stations that are represented by RMLC and 425,000 composers responsible for some 8,500,000 pieces of music that are represented by ASCAP.
The agreement in principle establishes a fee structure based on revenues, takes into account new radio distribution outlets, including internet and mobile, and takes steps to modernize and streamline the reporting process.
At the time of the agreement, Saga Communications honcho Ed Christian said, “This is a gratifying result for the radio industry, which reflects the current realities of our industry and puts the industry back on sound footing insofar as its licensing relationships with ASCAP are concerned. We appreciate the good will which ASCAP has demonstrated in working with our industry to get this resolution.”
ASCAP was also pleased with both the process and the results of the negotiations.
As yet there is no new agreement with BMI.
From RMLC, here is a summary of the new agreement:
The new ASCAP license covers the period January 1, 2010 through December 31, 2016 and includes the following highlights:
* A $75 million industry fee credit against 2010-2011 industry payments, to be credited in annual installments of $15 million each over 2012-2016 (this, in addition to the industry’s retention of $40 million in fee reductions that had been ordered by the same Court at the interim fee stage of litigation in calendar year 2010)
* Going forward, for blanket/music format license-reporting stations, a 1.7% of gross revenue fee structure (with simplified revenue reporting), less a standard deduction of 12% for revenue derived from terrestrial/analog and HD multicasting broadcasts and a 25% standard deduction for revenue attributable to new media uses
* Retention of the per program (or program period) license that benefits many talk-formatted stations, with a base fee of 0.2958% of gross revenue, less the same standard deductions
* Expanded rights coverage to accommodate the industry’s developing “new media” platforms related to Internet websites, smart phones, and other wireless devices.