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Download of a musical work does not constitute a public performance of that work

A blanket license is a license that gives the licensee the right to perform all of the works in the repertory for a single stated fee that does not vary depending on how much music from the repertory the licensee actually uses. ASCAP licenses the non-dramatic, public performance rights in copyrighted musical works. ASCAP licenses approximately 45% of all of the musical works that are played on-line.

Yahoo! provides music content in various ways across its website. However, only a small portion of the activity on Yahoo!’s website involves performances of musical works, and not all of the areas on Yahoo!’s website offer audio or audio-visual content. RealNetworks performs music in audio and audio-visual contexts through a number of websites and subscription services. Like Yahoo!, these sites and services publicly perform musical works in numerous formats, including, inter alia, radio, television, movie, game, and music-video formats. Also like Yahoo!, only a portion of the content on RealNetworks’ sites and services consist of performances of musical works.

In addition to performing music on websites and through services, the Internet Companies offer to users copies of recordings of musical works through download transmittals. A download is a transmission of an electronic file containing a digital copy of a musical work that is sent from an on-line server to a local hard drive. Only after the file has been saved on the user’s hard drive can he listen to the song by playing it using a software program on his local computer.

The Internet Companies primarily generate revenue from performances of musical works in two ways. On their websites, they make available, at no cost to users, performances of music, music videos, television programming, and the like that generate revenue from advertisements on the web page or in the audio or audio-visual player.

The district court found that, in all of the forms of website advertising it considered, one principle is common: the larger the audience and the more times a site is visited, the greater the revenue generated. The second primary way that the Internet Companies generate revenue from performing musical works is through subscription-based services.

The Internet Companies offer their customers the ability to download musical works over the Internet. These downloads create copies of the musical works, for which the parties agree the copyright owners must be compensated. However, the parties dispute whether these downloads are also public performances of the musical works, for which the copyright owners must separately and additionally be compensated.

The district court held that these downloads are not public performances. They are simply transfers of electronic files containing digital copies from an on-line server to a local hard drive. The user must take some further action to play the songs after they are downloaded. The definition of “publicly” simply defines the circumstances under which a performance will be considered public; it does not define the meaning of “performance.” “Transmittal of a work” is distinct from a transmittal of “a performance”.