Online music services could pay $100 million in royalties (Reuters)

SAN FRANCISCO (Reuters) - Time Warner Inc's AOL unit,RealNetworks and Yahoo Inc could stand to pay up to $100million in royalties owed to thousands of songwriters andpublishers, after a federal judge established a formula fordetermining the payments.

The move could force the three online services to payroyalties to the American Society of Composers, Authors andPublishers (ASCAP) worth 2.5 percent of their music revenuedating back to 2002, ASCAP said.

The decision by a judge in the U.S. District Court for theSouthern District of New York sets a formula for potentiallicense fees on songs played by the three online services fromJuly 1, 2002 through December 31, 2009, the trade group said.

But Bob Kimball, the general counsel for defendantRealNetworks, said the federal court ruling provided only aframework for talks on potential royalties.

"This is a long way from being over," Kimball said. "To beclear, the court did not award $100 million in royalties."

Marilyn Bergman, the chairman of ASCAP, which has amembership of 320,000 song writers and publishers, said thedecision goes a long way to protecting writers' and composers'rights to be compensated fairly.

Bergman is an Academy Award-winning lyricist who has workedwith Quincy Jones, Marvin Hamlisch and Frank Sinatra.

The ruling does not cover licensing rights held by musiclabels, ASCAP said.

Kimball of RealNetworks said the court had provided a"general and incomplete formula" that will require furthernegotiations to figure out how to apply it to differentbusinesses.

He said an extended appeals process was likely once thetrial court decision is final.

Spokesmen for AOL and Yahoo were not immediately availableto comment.

A copy of the court decision can be foundat:http://www.ascap.com/press/2008/0430_ratecourtdecision.aspx/.

(Reporting by Eric Auchard; Editing by Louise Heavens)