ASCAP Faces $123 Million Radio Royalties Lawsuit from Production Music Owners: ‘ASCAP Severely Underpays Its Non-Feature Music Members for the Utilization of Their Works’

Is ASCAP systematically underpaying radio performance royalties for non-feature music? A number of production music owners and publishers believe so, and they’ve slapped the PRO with a $123 million lawsuit as a result.

Alibi Music, Capp Records, Manhattan Production Music, and eight others, repped by entertainment attorney Richard Busch, submitted that multimillion-dollar complaint to the New York Supreme Court yesterday. A copy of the suit was shared with DMN.

Naming the American Society of Composers, Authors, and Publishers (ASCAP) as the lone defendant, the action covers multiple bases in its 16 detail-oriented pages. But at the top level, the plaintiffs maintain that “ASCAP is unreasonably and unfairly diverting over $15 million” in radio royalties from non-feature music owners annually.

This refers specifically to stock and library music used in the background and during program introductions, to name a couple examples – particularly on news, sports, and talk radio.

In some ways, the description harkens back to Universal Music head Lucian Grainge’s “noise” criticism. While 31-second audio uploads were allegedly gaming the system to secure streaming royalties, however, the non-feature music in question here is said to play a significant radio role.

The mentioned news, sports, and talk stations, paying approximately “17.4% of the blanket music station royalty rate,” tap “non-feature music to fill in the roughly 22 minutes on average per hour, of radio airtime that contains commercials, promotional messages, bumpers, transitions and themes,” according to the complaint.

Even so, ASCAP allegedly “fails and refuses to pay its non-feature music members all but a token amount of royalties from the monies it receives from” leading radio stations.

What, then, are the reasons for the alleged missing compensation? First, with similar arguments having been raised when it comes to detecting usages in public establishments, the PRO allegedly employs “completely unequal and unjustifiable performance detection methods” for non-feature music.

In a nutshell: Allegedly inadequate “sample data,” contrasting the performance-by-performance logging of full-length “feature” tracks, is purportedly at the center of the calculations. Media Monitors is said to supply “16 kbps, low-quality feeds” for non-feature sampling, which is “inadequate for reliable music monitoring.”

From there, Soundmouse audio fingerprinting tech is tapped to pinpoint usages. But it “cannot effectively identify music when overlaid with spoken word – a standard feature in radio when playing non-feature music,” per the legal text.

As a whole, “the unfair, unjust, arbitrary and capricious nature of ASCAP’s sampling methodology” has allegedly fueled a material performance undercount (and underpayment), according to the suit’s cited data from SourceAudio (the plaintiffs’ radio royalties administrator).

Running with said data, “ASCAP affiliated non-feature songwriters and publishers received payment for only 0.1% of their actual performances on broadcast radio” between 2021 and 2024, the action alleges.

And across the board, “it is estimated that only about 10% of non-feature music broadcast on domestic radio is actually counted by ASCAP’s wholly deficient methods and technology.”

One station-specific example: New York’s WINS, for which SourceAudio in 2021 “identified and logged 41,597 individual performances…of the music it represents, licenses, and tracks.”

“This amounts to 114 individual song performances per day, for an entire year (which is a very large number considering radio has a finite amount of airtime per day),” the suit spells out. “ASCAP paid on exactly zero of those performances even though WINS paid their annual license fee to ASCAP.”

As for the reason behind the alleged effort to shift “almost all of the royalties collected from these stations” to parties besides the plaintiffs, the complaint points to ASCAP board members’ commercial motivations and express approval.

“Despite the existence of readily availability [sic] technology to obtain a fair count of non-feature music on domestic radio (including but not limited to the technology ASCAP utilizes to count feature music performances),” the relevant text reads, “ASCAP has failed and refused to change its counting methodology for non-feature music.

“The sole reason given by ASCAP for this decision is that the current and wholly inadequate ASCAP methodology was approved by ASCAP’s Board of Directors. Underlying this decision, of course, is the fact that most of ASCAP’s Board of Directors are composers and representatives of composers and publishers for feature music used on radio,” the document continues.

A related-but-separate issue: ASCAP’s board-approved radio collections “weighting formula,” which in practice allegedly means “non-feature artists are also paid significantly less than they should be for the performances that are detected.”

“The Weighting Formula has been revised several times to favor feature performances over non feature performances,” the appropriate section explains. “ASCAP states these changes are intended to re-allocate revenue to feature music as a result of the overall decline in U.S. radio revenue.

“Said simply: these funds are funneled away from non-feature artists to appease feature music songwriters and major publishers.”

All told, the plaintiffs are suing for breach of contract and breach of the implied covenant of good faith and fair dealing, with $15.4 million in annual allegedly diverted royalties, added up for eight years, coming out to the initially highlighted $123 million.

In a statement, ASCAP described the suit as “baseless” and reiterated its board’s role in setting distribution policies.