Local Stations Pay Less to Piper

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TV stations will have to pay an average of 13% less for some of their music, according to a long-term agreement between the Television Music License Committee and the American Society of Composers, Authors and Publishers.

Under the terms of the 11-year agreement--retroactive to April 1998, when the previous license expired, and extending to April 2009--stations will reduce their annual blanket license payments from a collective $98.1 million to $85 million beginning Dec. 1, 2004.

That will include ASCAP-covered music used on their digital channels or streamed on their Web sites. That rate will begin to escalate in 2006 based on the consumer price index. There is also an opt-out option for either at the end of 2008 and a per-program license option.

Citing increased local newscasts and reality programming, neither of which use as much music as other types of shows, TMLC had argued that the industry was overpaying and wanted a reduction retroactive to 1998. It got the price break, though not quite as big as it wanted, but agreed to a November 2004 trigger for the reduced rate.

The committee felt secure enough in its arguments to want to take ASCAP to rate court. According to an antitrust consent decree, if ASCAP and the industry can't reach a deal, it goes to a U.S. District Court in New York. That trial had been scheduled for late September.

The new deal does not cover music on the Big Three networks, which are covered by separate ASCAP licenses, nor does it cover the music supplied stations by BMI and SESAC. TMLC is currently in talks about both those licenses--BMI's is $85 million per year and SESAC's $13.5 million--which expire at the end of this year.

Not all stations will necessarily see a cut in license fees, but if so, they will have their own success to thank for it.

The stations and ASCAP have been operating under an interim license for the past six years based on audience calculations from 1995-97. Although the average per station will be a 13% reduction in payment, because it is a blanket license, with a station's share of the payment calculated by audience, if that audience has gone up dramatically according to newer calculations, they could wind up paying more.

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