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Sony/BMG Has Already Left, Now Universal to Leave ASCAP For Digital Revenues

ASCAP Digital Quandary

ASCAP Digital Quandary

Ed Christman wrote this in Billboard yesterday : “On the heels of Sony/ATV and EMI striking a deal to directly license their music to Pandora, Universal Music Publishing has notified ASCAP and BMI that it too will no longer rely on the two performance rights organizations to negotiate digital performance licenses and royalty rates”


Just when they toldja it was all over, here comes round two.

There is a difference between publishing rights and licensing rights and here it is made plain:

Publishers get 12% of revenue

Labels get 58%  of reveue.This is a little complicated so i am gonna take it off the Billboard post: “With the consent decree constraints that apply to both ASCAP and BMI, in our view, it’s especially challenging for either society to achieve market rates in negotiations with digital services,” says UMPG chairman/CEO Zach Horowitz in a statement to Billboard. “In order to ensure that our songwriters are fairly compensated, we believe the best approach is for us to negotiate directly with these services.  For that reason we notified both ASCAP and BMI at the end of last year that we will be withdrawing our digital rights for controlled catalogs at the earliest opportunity.  With ASCAP, this will be effective July 1, 2013.  With BMI we are still working out the effective date.”

Le’s see if this simplifies it: “Since terrestrial and digital radio operate under compulsory licenses, BMI and ASCAP cannot refuse to grant a license to services like Pandora, even if a rate has yet to be negotiated. Once those type of digital services apply for a license, they may begin playing the music immediately and if the parties fail to negotiate a rate, any dispute goes to rate court, the U.S. District Court for the Southern District of New York, which is currently hearing a case between ASCAP and Pandora.”

In plain English, ASCAP have to license their music to Pandora, etc, and Pandora can play the music before the deal is cut, this leaves ASCAP at a serious disadvantage and now SONY/BMG and UMG want to see if, released from the ASCAP obligation they can cut a better deal.

The answer m by the way, is yes they can.



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