New licenses for Web music

The proliferation of Web sites that feature music in written or aural form have raised new concerns about copyrights and royalties.

Two organizations that handle the licensing of music to the various businesses that use it--the American Society of Composers, Authors, and Publishers and BMI--have stepped up their efforts to get royalties paid to copyright holders from performances of music online.

ASCAP announced a new set of licensing agreements last week designed for the vast number of business models online. Whereas its roughly 50 licensing agreements for businesses that use music in the physical world--including radio stations, hotels, stores, and restaurants--came about gradually with the demand for them, the Web has presented ASCAP with many models all at once.

"As music use on the Web mushrooms, we are exploring new ways to make it easier for Web site operators to use ASCAP music, while continuing to fairly compensate the people who create and publish that music," ASCAP chief executive John LoFrumento said in a statement.

Under the new ASCAP license agreement, Web operators can select from three rate schedules the one that best reflects their online business model and use of music. ASCAP says it has simplified the calculations to fill out the forms and determine which rate schedule will save the most money for each Web site.

Another question presented by the Web is what exactly constitutes a public performance--which is the basis for a charge by ASCAP and BMI. Both nonprofit organizations charge royalties based on public performance, not the sale of music online. The license fees go back to the songwriters, composers, and music publishers who create the music, minus the organizations' operating expenses.

In October, BMI updated its 1995 licensing agreement structure and broke it out into several categories under a structure that is different from the one just announced by ASCAP. To help monitor the use of music in cyberspace, BMI has also launched "MusicBot," a Web robot designed to gather market information and music trends.

ASCAP's various models are designed for different types of sites, whether they are music rich, how closely they monitor the amount of music accessed, and whether they track the use of individual pieces of music, according to Bennett Lincoff, ASCAP director of legal affairs for new media. He stressed that the minimum license fee was reduced by 50 percent, to $250.

So far, the feedback is good. "In the past it was really a complex process to get licensed," said Bill Woods, director of marketing communications at Liquid Audio. "Now they've said, 'Here's an easy way to get compliant and still be able to use the music.' It's a good thing for us."

One problem is that many site creators are new to the music industry and are not familiar with their legal responsibilities, said Matt DeFilippis, ASCAP's account executive for new media.

"It's an education process to people unfamiliar with music licensing," he said. "Different sites raised different issues. Some people think they don't need licenses for [music] samples, or because they have no revenue [coming in]. These are all false."

DeFilippis noted that many music sites are start-ups and are not yet profitable. "That's why we tried to make a reasonable minimum."

Copies of the licensing agreements for ASCAP and BMI can be downloaded at their Web sites.