SESAC-RMLC Deal Seen As 'Historic'

According to SESAC, its songwriters will see a rate 50 percent higher than the one set by a federal rate court for songwriters represented by ASCAP. While SESAC is a privately owned company, ASCAP is a nonprofit organization that is governed by a federal consent decree.

It's a certainty that BMI, which is also regulated by a consent decree, will use the SESAC rate as evidence in its upcoming rate hearing to determine the royalty rate its songwriters are paid. BMI and ASCAP combine to represent about 90 percent of the U.S. music licenses.

SESAC's rate was set by a panel of three private arbitrators. The rate applies to the approximately 10,000 radio stations that are represented by the Radio Music Licensing Committee.

"I cannot emphasize for you enough the historic nature of this. No one had ever litigated the rates with radio before. This was the first time," said Barry Massarsky, a music economist and owner of Massarsky Consulting told The Tennessean.

Massarsky pointed out that 78 percent of all radio stations rely on music for their programming, but those stations only pay about 4 percent of their revenue for music licensing, according to filings for publicly traded broadcast companies.

Songwriters and publishers are paid fractions of a penny each time their songs are played over the radio. In the U.S., record labels and artists are generally not paid for radio airplay at all.