FEDERAL COURT DECIDES LICENSE FEES TO BE PAID TO ASCAP BY AOL, REALNETWORKS AND YAHOO!


Historic Decision Provides Framework for Valuing Use of Musical Works Online

On April 30th, the United States District Court for the Southern District of New York made public a decision in the proceeding to determine reasonable license fees to be paid to ASCAP by AOL (Time Warner Inc., NYSE: TWX), RealNetworks Inc. (Nasdaq: RNWK) and Yahoo! Inc. (Nasdaq: YHOO) for their online performance of musical works.

The decision covers license fees for periods starting as far back as July 1, 2002, and continuing through December 31, 2009, for the performance of musical works in the ASCAP repertory by AOL, RealNetworks and Yahoo! Based on the formula established by the Court, the total payments to be made to ASCAP and its membership by these three services for that full period could reach $100 million. The Court's comprehensive 153 page decision was based on extensive evidence presented by both sides in the case regarding the online performance of musical works by AOL, RealNetworks and Yahoo! The decision has no relation to the rights owned by record companies.

"The Court's finding represents a major step toward proper valuation of the music contributions of songwriters, composers and publishers to these types of online businesses - many of which have built much of their success on the foundation of the creative works of others," said ASCAP President and Chairman Marilyn Bergman. "It is critical that these organizations share a reasonable portion of their sizable revenues with those of us whose content attracts audiences and, ultimately, helps to make their businesses viable."

"Musical works both support and enhance the business models of many major technology- and Internet-driven organizations - especially those that derive advertising revenue from consumer traffic and engagement," said ASCAP CEO John A. LoFrumento. "This decision provides a clear framework for how the online use of musical works should be appropriately valued. This decision also provides clear validation of the flexibility and applicability of the ASCAP blanket license model relative to the use of musical works on the Internet - something the Court itself specifically noted in its written decision."