updated 10:45 am EDT, Fri September 25, 2009
Verizon pays ASCAP ringtone rights
Verizon on Thursday took preemptive action and paid the music royalty group ASCAP $4.99 million as an "interim" license for cellular ringtones on its V CAST service. The payment covers all ringtones bought since November 11th 2004 and is meant to temporarily settle the issue until the two settle a dispute over how much Verizon owes, if at all, for the short samples. It's unclear if the payment is reversible.
The payment is potentially controversial as it appears to tacitly approve of an ASCAP effort to collect royalties for song samples. The organization has maintained that ringtones and preview samples should be considered public performances and thus that online stores using either need to pay for each download.
Critics, including major online music backers like Apple, have attacked the approach as "double dipping" by collecting royalties twice for the same work. Online stores already license the content for distribution, and opponents to ASCAP have pointed out that samples and ringtones are not only private but that they're often marketing efforts that encourage listeners to buy full tracks. Worries also exist that a second royalty would indirectly raise the prices of music by raising the expenses of running these stores.
Legally, ASCAP has so far been rejected from collecting these sorts of royalties and is so far basing some of its hopes on an appeal in court. [via TechCrunch]