The crying side would be Yahoo, AOL and RealNetworks, the major online services affected by the new formula, while the American Society of Composers, Authors and Publishers (ASCAP), is expected to reap millions of dollars in royalties.

For example, although U.S. District Judge William Conner did not specify total amounts owed to ASCAP, computations for 2006 have AOL owing the society $5.96 million for 2006 and Yahoo owing 6.76 million for the same year. What’s more, the new formula computing royalties for up to a seven-year period ending in 2009. So there’s some retroactive payments to be made as well.

For Yahoo, that means having to pay royalties according to the formula for each year starting with 2002, while RealNetworks must start with 2004 and AOL is looking at paying royalties starting from 2005.

The royalties are for authors, composers and publishers only, and do not affect what the companies must pay record labels.

How did the royalty issue end up in court? Simply put, all sides disagreed on the rates.

The online companies wanted to pay less. Much less. For 2006, AOL proposed paying $632,879, and Yahoo felt it owed only $889,402.

Furthermore, the companies wanted a multi-tiered rating scale, paying more for on-demand audio, and less for Internet radio and music videos, according to

And ASCAP wanted more. And that resulted in a stalemate.

So it was off to rate court, which resulted in the new formula.

“This historic decision, for the first time, provides a clear framework for how the online use of musical works should be appropriately valued,” said John LoFrumento, ASCAP’s chief executive.