New York - A federal judge in New York has created a formula for calculating the royalties that large webcasters AOL (NYSE: TWX), RealNetworks (NASD: RNWK) and Yahoo (NASD: YHOO) must pay songwriters and music publishers for streaming their songs between 2002 and 2009, which could provide just one performing rights organization, ASCAP, as much as $100 million in payments. U.S. District Judge William Conner's ruling stipulates that the webcasters must pay 2.5% of music-related revenue to ASCAP's 320,000 members; by that math, for 2006, AOL owes $5.95 million, and Yahoo owes $6.76 million.

Those figures are considerably higher than the payments proposed for 2006 by AOL ($632,879) or Yahoo ($889,402), yet still a bit shy of what ASCAP had asked for from the court.

"This historic decision, for the first time, provides a clear framework for how the online use of musical works should be appropriately valued," said ASCAP CEO John A. LoFrumento.

No statement on the ruling has yet been issued by the Digital Media Association, which represents large webcasters including AOL, RealNetworks and Yahoo, or BMI, the other large performing rights organization, which counts 375,000 members.

The judge's ruling also has no bearing on the separate royalties that webcasters must pay to record labels and other copyright holders through SoundExchange.

Related Links:
http://www.ascap.com/press/2008/0430_ratecourtdecision.aspx

http://snipurl.com/26orz (PDF of ruling)

http://www.mercurynews.com/business/ci_9116260 (AP)

http://snipurl.com/26oyw (Ars Technica)

http://www.digmedia.org (Digital Media Association)