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Web radio gets $1.7 billion boost

Music publishers, radio group say their new licensing deal is the biggest in the history of American radio.

The American Society of Composers, Authors and Publishers announced Monday that it has reached a $1.7 billion deal with the Radio Music License Committee to let stations legally stream their on-air content over the Internet.

With the deal, the radio group said, its 12,000 member stations gain the right to program ASCAP-regulated music online simultaneously with their on-air signals. The two industry groups labeled the agreement as the largest licensing deal in the history of American radio.

The groups said the agreement includes retroactive licensing fees for the years 2001 to 2003 and establishes a new guideline to be followed from 2004 until 2009. The deal replaces an existing system of revenue-based licensing fees with a royalties schedule for stations that will stream significant amounts of ASCAP-controlled content.

The deal was approved Friday by U.S. District Court Judge William C. Conner.

Executives at the RMLC said they were pleased to win the ability for their members to separate online royalties from the fees they already pay ASCAP for on-air content. Representatives of the composers and publishers group said the deal should serve as a boon to its own coffers.

"Over $1.7 billion dollars, fixed through 2009, indicates the true economic value of our members' music to the radio industry," Vincent Candilora, ASCAP's director of licensing, said in a statement. "We were pleased to have reached an agreement that establishes significant income increases for our members that they can count on well into the future."

ASCAP indicated that the agreement also would prevent potentially expensive litigation for both groups. The organization's musical repertory covers over 7.5 million copyrighted titles.

The pact is only the latest in a stream of music and radio industry efforts meant to help establish a payment system for online radio broadcasts. In April 2003, two industry groups, the Digital Media Association (DMA) and the Recording Industry Association of America (RIAA), agreed to a proposal for royalty fees that Internet radio services must pay record companies for Webcasting their songs.

Based on that agreement, Internet companies such as America Online, Microsoft, RealNetworks and Yahoo pay 0.0762 cent for each song that they Webcast from their radio services. However, the terms of that deal only run until the end of 2004.

The ASCAP-RMLC deal affects radio stations' rights to program music publicly, either via traditional broadcast or online. Other efforts in the segment, such as the DMA-RIAA guideline strategy, are aimed at transactions involving music titles, such as the downloading of MP3 files.

Beyond programming royalties, a number of parties, including consumer groups, electronics companies and record labels, are squaring off in an effort to establish antipiracy standards for digital radio networks. In that debate, the RIAA has asked the Federal Communications Commission for legislation that would prevent listeners from archiving songs downloaded via the Web without paying for them--and from trading recorded songs online.