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U.S. Court Sets Formula for Online Music Royalties

In a recent ruling, a U.S. federal judge has set a formula for the royalties to be paid to the American Society of Composers, Authors and Publishers (ASCAP) by AOL, Yahoo and RealNetworks for the online performance of musical works in the ASCAP repertory. Based on the formula, ASCAP, which represents 320,000 music composers, writers and publishers, will be entitled to royalties for its members of up to 2.5% of the music-related revenues of AOL, Yahoo and RealNetworks. The decision applies to the period starting as far back as July 1, 2002, and continuing through December 31, 2009. As a result, it is contemplated that these three major on-line services could be required to pay license fees of up to $100 million, depending on how much music they stream over the Internet.

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