United States: Second Circuit Rules Digital Music Downloads Are Not Public Performances Under the Copyright Act

The Second Circuit recently held that the download of a digital file containing a musical work is not a "public performance" of the underlying work, and therefore that online music vendors need not obtain or pay for public performance licenses for their distribution of – and their customers' use of – digital music files. United States v. Am. Soc'y of Composers, Authors, and Publishers (Applications of RealNetworks, Inc., Yahoo! Inc.), No. 09-0539-cv (L) (2d Cir. Sept. 28, 2010). The court also held that fees for public performance licenses for streaming music services may not be determined solely by using a ratio of time users spend streaming music versus using other online services. 

The Parties and the Public Performance Licenses at Issue

Yahoo! Inc. ("Yahoo") and RealNetworks, Inc. ("RealNetworks") each provide music content in various ways across their Web sites and subscription services, including streaming music services and download transmittals. 

Yahoo! and RealNetworks each sought separate blanket licenses in connection with their online music services from the American Society of Composers, Authors, and Publishers ("ASCAP"). ASCAP is a performing rights organization that represents the owners of copyrights in musical compositions (as opposed to copyrights in sound recordings).  ASCAP licenses on a non-exclusive basis the non-dramatic public performance rights to these compositions. ASCAP licenses approximately 45% of all the musical works that are played online.

Yahoo! and RealNetworks negotiated with ASCAP for a blanket license in connection with their various online music services, which included downloading and streaming of musical compositions from ASCAP's catalogue.  When those negotiations proved unsuccessful, ASCAP applied to the Southern District of New York for a determination of reasonable fees.1  The district court held that the download of a digital file containing a musical work does not constitute a public performance of that work, and therefore that Yahoo! and RealNetworks did not need to obtain public performance licenses for their music download services.2  As to the other online music services, the district court set a royalty rate of 2.5% of revenue derived from playing music, as determined by a formula based upon the amount of time a user spent streaming music versus using other online services Yahoo! and RealNetworks offered.  ASCAP appealed the district court's decision regarding download services, while Yahoo! and RealNetworks appealed the district court's fee determination for music streaming services.

"Performance" of Copyrighted Work Requires "Contemporaneous Perceptibility"

ASCAP argued on appeal that downloading digital music files constitutes a "public performance" under the Copyright Act.   

The right of public performance is one of six exclusive rights granted to a copyright owner.  17 U.S.C. § 106(4).  Under the Copyright Act, to "perform" a work means "to recite, render, play, dance, or act it, either directly or by means of any device or process...."  17 U.S.C. § 101.  The act defines "publicly," in relevant part, to mean "to transmit or otherwise communicate a performance...to the public, by means of any device or process, whether the members of the public capable of receiving the performance...receive it in the same place or in separate places and at the same time or different times."  Id. 

In evaluating ASCAP's statutory interpretation, the Second Circuit first looked to the definition of "performance" under the Copyright Act.  Because a download cannot be construed as either a "dance" or an "act," the court looked to whether a download of a musical work falls within the meaning of the terms "recite," "render," or "play" under § 101.  The court evaluated the ordinary meaning of each of these terms and determined that each of these actions entails "contemporaneous perceptibility" of the copyrighted work.

Slip Op. at 14.   

Itzakh Perlman gives a "recital" of Beethoven's Violin Concerto in D Major when he performs it aloud before an audience.  Jimmy Hendrix memorably (or not, depending on one's sensibility) offered a "rendition" of the Star-Spangled Banner at Woodstock when he performed it aloud in 1969.  Yo-Yo Ma "plays" the Cello Suite No. 1 when he draws the bow across his cello strings to audibly reproduce the notes that Bach inscribed.  Music is neither recited, rendered, nor played when a recording (electronic or otherwise) is simply delivered to a potential listener.

Slip Op. at 15.  Downloads of digital music files, by contrast, are not "contemporaneously perceived" by the consumer. 

They are simply transfers of electronic files containing digital copies from an on-line server to a local hard drive.  The downloaded songs are not performed in any perceptible manner during the transfers; the user must take some further action to play the songs after they are downloaded.  Because the electronic download itself involves no recitation, rendering, or playing of the musical work encoded in the digital transmission, we hold that such a download is not a performance of that work, as defined by § 101.

Slip Op. at 16.

ASCAP argued that § 101's definition of "publicly," which includes the phrase "to transmit or otherwise communicate a performance," requires that a download be considered a "public performance."  The court rejected this argument, holding that "[t]he definition of 'publicly' simply defines the circumstances under which a performance will be considered public; it does not define the meaning of 'performance.'"  Slip Op. at 17.  "'[W]hen Congress speaks of transmitting a performance to the public, it refers to the performance created by the act of transmission,' not simply to transmitting a recording of a performance."  Slip Op. at 17 (quoting Cartoon Network LP v. CSC Holdings, Inc., 536 F.3d 121, 136 (2d Cir. 2008)). 

The court contrasted downloads, which it concluded are not performances, with streaming:

[S]tream transmissions, which all parties agree constitute public performances, illustrate why a download is not a public performance.  A stream is an electronic transmission that renders the musical work audible as it is received by the client-computer's temporary memory.  This transmission, like a television or radio broadcast, is a performance because there is a playing of the song that is perceived simultaneously with the transmission.  In contrast, downloads do not immediately produce sound; only after a file has been downloaded on a user's hard drive can he perceive a performance by playing the downloaded song.  Unlike musical works played during radio broadcasts and stream transmissions, downloaded musical works are transmitted at one point in time and performed at another.  Transmittal without a performance does not constitute a 'public performance.' 

Slip Op. at 18-19 (omitting internal citations). 

The court distinguished its holding in NFL v. PrimeTime 24 Joint Venture, 211 F.3d 10 (2d Cir. 2000), in which a satellite television provider's unauthorized transmission of football games from the United States to a satellite was deemed a public performance of the games.  The court reasoned that the uplink transmission from the United States to the satellite was an "integral part" of the larger process by which the games were "uplinked" from the United States to the satellite and immediately "downlinked" from the satellite to viewers in Canada.  Id. at 11-13.  The "immediately sequential downlink" of the satellite feed rendered the uplink itself a public performance.  Id.  The Second Circuit contrasted its holding in Cartoon Network, where the transmission of television programs to remote digital video recorder hard drives did not constitute a public performance:

Just as in Cartoon Network, [Yahoo and RealNetworks] transmit a copy of the work to the user, who then plays his unique copy of the song whenever he wants to hear it; because the performance is made by a unique reproduction of the song that was sold to the user, the ultimate performance of the song is not 'to the public.'

Slip Op. at 21 (citing Cartoon Network, 536 F.3d at 137-138).

Public Performance Licenses for Online Streaming May Not be Determined Based Solely on the Ratio of Streaming to Non-Streaming Internet Use

Yahoo! and RealNetworks challenged the district court's application of blanket license fees for online music streaming based upon a 2.5% royalty rate applied to "music-use revenue," which the district court determined by taking the ratio of time users spent streaming music versus using other online services Yahoo! and RealNetworks offered.

The Second Circuit first took issue with the district court's determination of "music-use revenue."  The Second Circuit agreed that the license fee should be based upon revenue derived from the music being licensed, but found error in the district court's method of determining the music-use ratio. 

With respect to Yahoo!, the Second Circuit noted that Yahoo!'s revenue is primarily derived from advertising, from which revenue is driven by the number of page views as opposed to the amount of time a user streams music.  Slip Op. at 28.  The Second Circuit held it is "unreasonable to use streaming time, which has no necessary correlation with page views, as a proxy for the number of times a page is viewed; time spent on-line is not reflective of how a user interacts with a particular page."  Slip Op. at 29.  The Second Circuit did not identify a specific method for developing a formula for determining music-use revenue, but held that it must either incorporate page views or provide some rationale for not doing so.  Slip Op. at 31.  The Second Circuit did, however, note that "music can enhance a user's experience on Yahoo! even when he navigates away from the streaming page to another Yahoo! webpage", and that therefore the amount of streaming time may be taken into account in some fashion in the formula for determining music-use revenue.  Slip Op. at 30-31, n.14. 

Regarding RealNetworks' subscription-based streaming and downloading services, the district court applied various ratios of music streaming versus total streaming of all content through these services.  The Second Circuit held the district court failed to explain the bases for these music-use ratios, and directed the district court on remand to consider:

(1) whether its method for calculating the [music-use ratio] for the Rhapsody subscription service is more precise or practicable than the method used in the benchmark agreements in the record; (2) whether there is a more precise way, that is also practicable, to account for the value of the music use for the SuperPass subscription service in light of the fact that some components of the subscription do not involve the streaming of content to users; and (3) whether there is a more precise and still practicable way to measure RealNetworks' advertising revenue, in light of the issues we raised in our discussion of Yahoo!'s [music-use ratio].

Slip Op. at 35-36.

Finally, the Second Circuit held that the district court's application of a uniform 2.5% royalty rate across all of Yahoo!'s and RealNetworks' online music services was unreasonable.  Slip Op. at 36-37, 47.  The district court justified the 2.5% royalty rate by comparing it to benchmark rates ASCAP negotiated with other licensees.  The court determined that the 2.5% royalty rate was appropriate for "sites and services that provide access to music channels organized around music genre" but not to services that were "less music intensive."  Slip Op. at 37-38, 47.

(Special thanks to Robert D. Forbes, author of this alert)


1. The Southern District of New York has jurisdiction over the determination of reasonable fees for ASCAP licenses pursuant to a 1941 consent decree, as amended from time to time, in a civil antitrust action brought the United States brought against ASCAP.  See United States v. Am. Soc'y of Composers, Authors & Publishers, No. 13-95, 1941 U.S. Dist. LEXIS 3944 (S.D.N.Y. Mar. 4, 1941).

2. The parties did not dispute that the downloads create copies of the musical works, for which the copyright owners must be compensated.  17 U.S.C. § 106(1).


The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions