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Rate Court Hands BMI Victory in Music Choice Case

Posted in News on June 14, 2004
Federal District Judge Louis L. Stanton, who presides over the BMI Rate Court in New York, has ruled in the performing rights organization's favor regarding the establishment of final fees for the use of the BMI catalogue by Music Choice, a subscription digital audio music service to cable systems and satellite carriers. The fees will increase from 1.75% of gross revenues to 3.75% of gross revenues and is applicable to the period from October 1, 1994 to September 30, 2004.

In making the announcement, BMI President & CEO Frances W. Preston said: "This decision represents a victory for BMI in establishing the legal principle that the retail value of BMI music to the consumers must be the basis for setting license fees."

Judge Stanton had ruled in July 2001 that fees should be set at 1.75% of Music Choice's gross revenue, ignoring the full retail price paid by the consumer for music services. BMI appealed that decision, and the U.S. Court of Appeals for the Second Circuit agreed with BMI. The appellate court sent the case back to Judge Stanton for further proceedings. The new license fee of 3.75% of Music Choice's gross revenues set by Judge Stanton takes retail value into account.

This is the second ground-breaking BMI license announcement in less than a year. In July 2003, the company announced an unprecedented agreement with the radio industry for both blanket and per program licenses that is, to date, the largest license deal in performing rights history.

The BMI Rate Court was established in 1994 in New York City to provide a means by which BMI and its licensing customers can seek a judicial determination of reasonable license fees in the absence of a negotiated resolution.

SOURCENews TAGS Licensing Rights Management