Tag Archives: ASCAP

The Difference between ASCAP and BMI

Todd Brabec is the Vice President and Director of Membership for the American Society of Composers, Authors, and Publishers (ASCAP). He talks about the differences between ASCAP and BMI. One of the main differences is the reason each organization was founded. ASCAP is a writer and publisher owned organization dedicated to enforcing the copyright law. BMI is a corporation owned by the broadcasting industry. The two organizations also differ in other ways such as payment formulas. Also in this segment, Brabec stresses the affiliation regulations. Writers have to join one or the other. However, writers are free to switch to the other organization. The significance of a good relationship with foreign societies is covered as well. Brabec also focuses on the importance of having a contact at the performing rights organization (PRO). Also in this segment, he offers some advice. Brabec recommends knowing information such as the PRO’s philosophy and if they pay correctly in certain areas.

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Music Licensing Deals in Today’s World: Making Money as a Songwriter

Video game royalties, music in apps, movie and television song negotiations, interactive dolls and toys, e cards, performing right organization radio payments, live performance royalties, non-interactive and interactive streaming, downloads and physical product sales, music in ads, Broadway shows, lyrics on clothes, musical toothbrushes – these are but some of the areas where songwriters and composers make money in today’s world of music. Todd Brabec, former ASCAP Executive Vice President and author of” Music Money and Success: the Insider’s Guide to Making Money in the Music Business” will discuss how traditional licensing deals work as well as how new media licenses in the online world are structured and negotiated. He will also talk about how much money can be made in the initial negotiation as well as the back-end royalties that can continue for many decades from song uses throughout the world.


ASCAP Reports Increased Revenues in 2011

ASCAP Reports Increased Revenues in 2011

Delivers Licensing Innovations, Operational Efficiencies and
Enhanced Services to Members

CEO John LoFrumento Announces Dynamic New Leadership Structure
EVP Randy Grimmett Leads Expanded Membership Department
Vincent Candilora Promoted to EVP, Licensing
Roger Greenaway Named EVP, International

New York, NY, March 8, 2012: ASCAP, the global leader in performance rights
royalty collections and advocacy on behalf of songwriters, composers and copyright
owners, today announced strong revenues of $985 million for calendar year 2011,
the second highest revenues in the organization’s history, and an increase of 5.4%
over 2010. Collections from foreign countries totaled $347 million, an increase of
approximately $50 million over 2010.

ASCAP President and Chairman Paul Williams commented: “The demand for ASCAP’s
repertory across all genres of music is enormous and growing by leaps and bounds,
both domestically and abroad. A major driver of our revenue growth in 2011 was
the popularity of our members’ music abroad, leading to the highest ever foreign
collections bolstered by an advantageous foreign exchange rate. As songwriters and
composers, we depend on the efficiencies of ASCAP to manage our performing rights
in a rapidly changing global economy. ASCAP’s advocacy throughout the world is an
important factor in ensuring fair treatment and compensation for songwriters and
composers of every kind of music.”

Representing more than 425,000 music creators from every genre, the member-
owned organization distributed over $824 million to its songwriters, composers
and music publishers. ASCAP is the only performing rights organization (PRO) to
distribute royalties exceeding $800 million annually, which it has done for the past
four years, delivering a total of $3.3 billion to its members. ASCAP remains among
the most-efficient performing rights organizations with an operating expense ratio
among the lowest in the world — 11.9%, down 2 percentage points from last year.

According to ASCAP CEO John LoFrumento, “ASCAP has been able to deliver
strong financial results for our members through licensing innovations, operational
efficiencies and growth in foreign revenues. We will continue to meet the challenges
of this economy and evolving music marketplace through innovation and by offering
the best model for licensing the most in-demand repertory of music in the world. In
this unsettled time, our goal is to ensure a stable future for our members.”

Toward that end, several multi-year license negotiations were concluded with major
licensees in 2011, including XM/Sirius Radio, HBO, Viacom and the radio industry,
providing security and certainty for ASCAP members for the next five years. The
radio settlement includes a return to a revenue-based fee structure as radio is
broadening its revenue base through new distribution platforms, such as online,
wireless, multicast and HD stations.

In 2011, Netflix, Hulu and Spotify were among the major digital services that signed
ASCAP blanket license agreements. For digital services with billions of performances,
an ASCAP blanket license provides unparalleled flexibility and efficiency. The blanket
license proves a valuable and simple solution to legally perform the ASCAP repertory
of over 8.5 million copyrighted works while respecting the right of songwriters and
composers to be paid fairly. ASCAP has already licensed thousands of new and
established new media services, ranging from start-ups to the biggest players on the
Internet and mobile networks.

ASCAP members continued as the dominant creative forces in music throughout
2011, taking home major honors and awards, and writing the world’s most
performed and best-loved songs, scores and compositions. Oscars went to Trent
Reznor and Randy Newman; Golden Globes to Randy Newman and Diane Warren;
the Pulitzer Prize to Zhou Long; Jay Z, Jeff Beck, Arcade Fire, Josh Kear, Paul Worley
and Esperanza Spaulding won big at the Grammys; Trey Parker and Matt Stone’s
Book of Mormon captured multiple Tonys; Katy Perry became the first woman
to score five #1 singles from the same album; and ASCAP members claimed the
top nine spots on Billboard’s list of the top Hot 100 songwriters of the decade –
Timbaland, Dr. Luke, Pharrell Williams, Max Martin, Rob Thomas, Alicia Keys, Akon,
Scott Storch and Stargate’s Mikkel Eriksen and Tor Hermansen.

ASCAP continued to offer members the best career development, education and
professional recognition through our highly successful and innovative programs,
from the annual ASCAP “I Create Music” EXPO to the Sundance/ASCAP Music Café
to TV and film composing workshops to multi-genre songwriting workshops and
songwriting camps, bringing together emerging and hit writers, to our annual award
shows.

Also in 2011, ASCAP introduced several enhancements to its online Member Access
interface, providing members with the most advanced online tools in performing
rights for managing their catalogs, royalty statements and more.

New Leadership Structure

ASCAP created a new organizational structure in 2011 which consolidated several
operational areas and expanded the Membership, Licensing and International
departments into synergistic units positioned to deliver enhanced services to
members, operational efficiencies and licensing innovations. Three ASCAP
executives were tapped to the lead the new departments:

EVP, Membership Randy Grimmett was promoted to take on added leadership of
a multi-functional membership department which consolidates member services,
creative services, business affairs, estates and claims, and marketing and
communications into a fully integrated department that is serving the evolving career
needs of members and providing the strongest advocacy for their work.

Vincent Candilora, formerly SVP, was promoted to Executive Vice President,
Licensing, taking leadership of all licensing-related areas including broadcast, cable,
online, wireless and general licensing as well as infringements.

Roger Greenaway, formerly SVP, International, and based in London, is now

named EVP, with all international operations reporting to him, including relationships
with foreign societies, collection of foreign revenues and distributions.

Commenting on the executive promotions, LoFrumento said: “As the only member-
owned performing rights organization, we are committed to providing members
with the best payments, advocacy, services, tools, information and education to
help them succeed now and in the future. Randy Grimmett has proven himself
as a forward-thinking leader who understands how our members are impacted by
business trends and what we need to do to protect their livelihoods. As a strategist
and negotiator, Vincent Candilora’s experience has been an important part of
ASCAP’s ongoing licensing success and he has spearheaded several innovations
in how licensees interface with ASCAP, resulting in reduced costs. Roger
Greenaway’s expertise and deep understanding of the international market have
ensured ASCAP’s global leadership to the benefit of our members, as evidenced by
our 2011 collections.”

[Note: Financial results reported in this press release are un-audited. Independently
audited results will be available in May 2012.]

About ASCAP
Established in 1914, ASCAP is the first and leading U.S. Performing Rights
Organization (PRO) representing the world’s largest repertory totaling over 8.5
million copyrighted musical works of every style and genre from more than 425,000
songwriter, composer and music publisher members. ASCAP has representation
arrangements with similar foreign organizations so that the ASCAP repertory is
represented in nearly every country around the world where copyright law
exists. ASCAP protects the rights of its members and foreign affiliates by licensing
the public performances of their copyrighted works and distributing royalties based
upon surveyed performances. ASCAP is the only American PRO owned and governed
by its writer and publisher members. http://www.ascap.com

Press Contacts:
Bobbi Marcus
Bobbi Marcus PR & Events, Inc.
310-889-9200
bobbi.marcus@bobbimarcuspr.com

Lauren Iossa
Sr. Vice President, Communications & Media
ASCAP
212-621-6226
liossa@ascap.com

SOURCE:
ASCAP Reports Increased Revenues in 2011


The Returned Value of PROs by Frederic Choquette

The Returned Value of PROs

Performing Rights Organizations (PRO) should be regarded as any artist/songwriter’s best friends. Societies such as ASCAP, BMI and SESAC are responsible for collecting all performance royalties and distributing them to their members, which include songwriters and publishers (but not the record labels). The income generated by these licensing deals is crucial for music creators.  In the United States, ASCAP and BMI are by far the largest of the three organizations, collecting a combined 96-97% of all performance royalties. SESAC, the only other PRO in America, is much smaller and takes pride in being selective as to whom its members can be. This explains why its share of the performance royalty collection market is so much smaller than the other two, as ASCAP and BMI are open to almost any artist having a commercially released recording, a published printed sheet music, or claimed “evidence of a performance of the composition.”[1] SESAC is also privately owned, meaning it is not obligated to publicly divulge any of its financial statements or internal procedures relating to royalty collection and distribution. It is for those reasons that this article will focus on ASCAP and BMI.

Collections

ASCAP collected $935 million in royalties worldwide for 2010, a 6% drop from their record high $995 million in 2009.[2] BMI on the other hand, collected $917 million, just a slight increase on 2009. Although for both societies the amount distributed is usually around $100 million lower than what is collected, these two organizations distributed a combined $1.684 billion to their members in 2010.  Deductions are meant to cover operational costs, which seems fair when taking into account the massive amount of computational power it takes to keep track of their enormous catalogues worldwide–and that’s not even including all of the litigation efforts deployed to protect those very same catalogues from unscrupulous use. However, the way these outlays are calculated vary slightly between the companies.

ASCAP stands for the American Society of Composers, Authors, and Publishers and the name describes exactly who actually runs the company. Their board of directors is comprised of 12 writers and 12 publishers, each elected by the members for two-year terms.[3] Their president is also elected by the membership and has “traditionally been a writer”[4] himself. This means that the people at the head of this company aren’t isolated from the creative side of the business and share common goals with most of their members. BMI, on the other hand, stands for Broadcast Music, Inc. and was originally formed by members of the broadcasting industry. Their board of directors is different from ASCAP’s in that instead of consisting of a mix between writers and publishers, it is made up of 13 people closely affiliated with various broadcasting industry corporations. The first thing that comes to mind when one hears about BMI’s affiliations is that there might be a conflict of interest, considering that BMI is collecting licensing fees from the same broadcasting companies represented on their board of directors. Many critics also point to the fact that BMI has many more members than ASCAP, 460 000 compared with 330 000, but collects and distributes almost $100 million less than ASCAP in royalties. However, although these issues aren’t completely unfounded, many factors must be taken into account when assessing the reasons for this apparent discrepancy in licensing monies collection.

First of all, a larger pool of members does not necessarily translate into more money from performance royalties, as not all of the members’ materials are commercially successful. We must keep in mind that being a member of one of these societies has no effect on whether an artist’s music will be played or not, especially since they almost exclusively focus on collecting licensing fees and have very little to do with artist promotion. That being said, it is more than likely that the ratio of artists whose music is publicly performed in BMI’s member pool is smaller than at ASCAP, explaining how they could have more members all the while collecting less money. Furthermore, more members do not necessarily translate into larger catalogues. ASCAP has a higher average of songs per member, making their catalogue larger than BMI’s and once again explaining why they would collect more money.

Regarding public performance, there are blanket licenses, which are the most popular type of license issued by a PRO. A blanket license in effect gives the licensee the right to play any music that is part of the PRO’s catalogue for a set period of time, at the end of which the fee is usually renegotiated, making adjustments when needed. These are issued to most radio stations, television networks, bars, clubs, and pretty much anywhere music is publicly performed. It is also important to note that these Performance Rights Organizations do not have the right to license dramatic works, i.e. musical plays, operas, ballets, musical comedies, etc. This is an important distinction because these types of works contain what are called grand rights and are usually licensed by “the composer or the publisher of the work.”[5]

The other major type of license issued is called the per-program license and in a way has been the Achilles’ heel of the PRO’s economic power. A per-program license, simply put, is issued on a per-program basis, meaning that a different license needs to be obtained every time a television station, for example, uses music that is part of either ASCAP, BMI, or SESAC’s catalogue. Logically, these licenses are much cheaper than blanket licenses, and in turn tend to reduce the revenues collected by these companies. Many types of broadcasting mediums who previously used blanket licenses have begun to make the change towards per-program licensing, which partly explains the $65 million drop in revenue collected by ASCAP from the 2009 to 2010.[6]

It is also important to note that although artists and publishers typically rely on the performance rights organizations to handle most of their public performance licensing matters, the agreements signed with ASCAP and BMI are non-exclusive. This means that the writer and publisher of a specific work are free to license the song to third parties at any time, as long as they give proper notification to their PRO. Nonetheless, a writer can only be a member of one Performance Rights Organization at a time. This is explained by the fact that if a writer were to be a member of two or more PROs, he would be getting paid multiple times for the same use of his song, which would count as fraud. Similarly, the writer and publisher of a work must be part of the same PRO. Although this may seem complicated, all major and indie publishers have to create three separate income entities, one for each organization (again, a song can only be part of one PRO’s catalog, or else it would receive double or triple the payments).

These payments can be a significant source of income for even marginally successful songwriters. In Music Money and Success, Todd Brabec, ASCAP’s former Executive Vice President and Director of Membership, discusses the specific amounts a writer and publisher can expect to collect in various circumstances. One of his examples, although slightly outdated, is for the number one song of the year on the Billboard pop charts; artist and publisher earnings were each, respectively, about $2 million a year. Other examples look at a theme song on a hit television series, which can earn $500,000 for a five year period or for a hit song’s lifetime earnings which can average $7.5 million. These figures represent an important share of a writer’s income, therefore explaining the importance of signing with one of these companies.

Distributions

This once again opens the debate as to which PRO is best and leads us to another major difference: the distribution of their collections. The two organizations in fact use very different methods of distributing royalties.

ASCAP uses an extremely complex, yet efficient, way of calculating artist royalty statements by attributing each writer a certain amount of credits based on the different types of airplay each respective song got for a specific quarter. The weight attributed to each play depends on the combination of the type of use, the licensee weight, the “follow the dollar” factor, the time of day when the song was played (for television), and the general licensing allocation.[7] All of these factors are multiplied together to give us a certain number of credits, which are later multiplied by a credit value in dollars, finally arriving at a dollar amount to be paid out to the writer. There are also “premium credits”, which ASCAP attributes to songs having reached a certain threshold of plays on radio or for songs used as themes or underscores on “highly rated networks and television series.”[8] It is also important to note that with the arrival of new public broadcasting mediums, ASCAP has tailored the above calculation methods in order to accurately represent their market share of the broadcasting industry.

At the other end of the spectrum, BMI has come up with dollar figure amounts for specific types of plays, which also vary depending on the type of use, time of day, duration of use, etc. They basically calculate the amount of plays received for a certain song and then multiply that number with the rate based on the aforementioned airplay categories. Another important aspect of BMI’s payment plan, generally 30-40% of all royalty statements,[9] is called the voluntary add-on method.  After much research and multiple phone calls to BMI, the calculation method used for these voluntary add-ons remains nebulous even though they represent a significant chunk of the artist’s royalty statements.

Thus, the payment methods employed by the two companies are dissimilar and should definitely be taken into consideration when one is looking to sign with a PRO.

More Benefits

It should be noted as well that total revenues include foreign sources of income. ASCAP and BMI, through the help of affiliate international PROs, collect royalties for performances across the world. ASCAP’s international revenue for 2009 was posted at $301.7 million, roughly 30.5% of their total income for the year[10]. Similarly, in 2009 BMI reported that of the $905 million collected, $258 million came from international royalties. A chart included in the 2009 issue of Music & Copyright showed that the large majority of the international royalties collected came from Western Europe (68.8%). Asia Pacific came in a distant second with 13.6%.[11] During a recent visit at Berklee College of Music, Seth Saltzman, ASCAP’s Senior VP of Member Management, was quoted saying that the Asian market was one of the great, untapped resources of the various performance rights organizations and that with their rapid rate of industrialization and population growth, a large increase in revenues collected from these areas should be expected in upcoming years.

Other differences between ASCAP and BMI include areas such as the writers’ and publishers’ involvement with the organization. ASCAP, being a membership organization, is very focused on membership involvement in many activities such as voting for the board of directors and selecting the president of the company. BMI is a corporation and does not rely on its members for the selection of the board of directors or president. Arguments for both methods can be made–proponents of ASCAP stating that it is essential for member’s voices to be heard in order for the company to keep in line with writer’s and publisher’s best interests, while proponents of BMI say that most songwriters have very limited business knowledge and that most decisions pertaining to the health of the business should be made by professionals specializing in these specific areas.

These two companies also differ in the way that they calculate airplay time earned for each specific song. Monitoring the roughly 10,000 radio stations in America would be close to impossible, so the two have come up with rather ingenious ways of using representative samples of the total airplay during a quarter, to calculate how many times a song has been publicly performed. Television tracking, on the other hand, is much easier since television stations produce logs for every single song, whether it is the theme to a show or simply a background jingle that appears during a program. These are then compiled and stored in gigantic databases before being used to calculate royalty payments.

A music writer or publisher should exercise due diligence in choosing either. Even SESAC, of which little reference has been made here, can be advantageous if its serves well a niche market in the writer’s genre of choice—like. For instance, SESAC Latina, a division solely devoted to various genres of Latin Music. Ultimately, the PROs are a practical response to enforce the collection of performance rights in a variety of old and new media outlets, clubs eateries, and larger entertainment venues—and not just nationally, but internationally.

by Frederic Choquette

References


[1] Brabec, Todd. Brabec, Jeffrey. Music Money and Success, Sixth Edition. Schrimer Trade Books, New York, NY, USA. p. 286.

[2] Music & Copyright, Issue 433. April 06, 2011.

[3] Brabec, Todd. Brabec, Jeffrey. Music Money and Success, Sixth Edition. Schrimer Trade Books, New York, NY, USA. p. 285.

[4] Ibid. p. 285.

[6] Music & Copyright, Issue 433. April 06, 2011.

[8] Ibid.

[9] Brabec, Todd. Brabec, Jeffrey. Music Money and Success, Sixth Edition. Schrimer Trade Books, New York, NY, USA. p. 297.

[11] Music & Copyright. April 06, 2009.

SOURCE:
The Returned Value of PROs


When you illegally download music you’re hurting more people than you think.

 


How You Can Clear Cover Songs, Samples, and Handle Public Domain Works By Alex Holz

How You Can Clear Cover Songs, Samples, and Handle Public Domain Works

By Alex Holz (Senior Director of Artist and Community Relations / rightsflow®, inc.)

Limelight Logo

ASCAP members who select “ASCAP” as their PRO affiliation during sign-up receive a special 25% discount on all Limelight service fees.

Limelight is the simplest way for artists to clear cover songs for physical and digital release. Artists can clear ANY song and ensure 100% of royalties are paid to publishers and songwriters.

Five Reasons to Use Limelight:

  • Allows you to clear ANY cover song
  • Licenses never expire
  • Volume discounts
  • Customer support via chat, email, and phone
  • Artists, labels, school groups, church choirs, and other users from over 46 countries and all 50 U.S. states trust Limelight!

Sign-up for FREE and receive the special 25%-offdiscount on Limelight by indicating your ASCAP affiliation during sign-up!

Flying an airplane and performing brain surgery (legally!) require one. So does distributing music. What is it? A license!

Licenses allow you to legally distribute, cover, and adapt music you don’t own or control. Knowing which licenses exist and how to obtain them saves headaches, aggravation, and most importantly — exorbitant legal fees incurred from copyright infringement.

The Golden Rule of Licensing: if you don’t own or control it, you likely need a license to use it.There are a few exceptions (such as public domain compositions), though the golden rule is a common sense guideline that can help determine when licenses are needed.

What do you want to do with the music? In order to determine the appropriate license, you’ll first need to answer some basic questions. Are you recording a cover song or adapting/altering an existing work? Do you want to include a sampled recording, or re-create the music entirely? Are you using a public domain composition, or one that is still protected under copyright? Each presents unique licensing challenges that must be addressed.

Make a Cover Song / “Re-make:”
Cover songs provide an easy way to target a new marketing base when placed alongside your own original works. In the digital age, cover songs can act as effective search engine optimizers for music (especially when you’re covering artists who don’t currently appear on iTunes, Amazon, Rhapsody, etc.).

As a professional songwriter, you may already be aware that anyone who wants to record a version of your song needs a mechanical license from the copyright owner, usually you or your publisher. Similarly, if you chose to record your own version of someone else’s previously recorded and distributed music, you would need to secure a mechanical license.  A mechanical license is actually a “compulsory” license granted to users under U.S. copyright law.  Usually, music users obtain these licenses through a music publisher or agent (such as Limelight).

There are several entities that can assist in clearing mechanical licenses and ensuring songwriters get paid.  Limelight is a simple, a one-stop shop to clear any cover song in order to distribute by means of digital downloads, physical albums, interactive streaming, and ringtones. Customers create an account and finalize their mechanical licensing and royalty accounting needs within minutes via a simple three-step process for a service fee of $15 per license (or less based on number of licenses) plus required statutory publishing royalties as set by law. Artists, bands and other musical groups can clear any song and ensure 100% of royalties are paid to the appropriate publishers and songwriters.

As a member benefit, ASCAP members receive a 25% discount off all Limelight service fees. To qualify, just designate ASCAP as your PRO upon registration sign-up.

Use a Sample
“Sampling” involves taking an existing piece of copyrighted music and combining it with another to create a new work. While sample usage has been especially prevalent in hip-hop and electronic music over the last 30+ years, samples have also been incorporated into other genres and present challenges in every scenario. Sample clearances are more complicated than cover songs since they can involve two separate copyrighted works (the music composition and the sound recording), multiple rights-holders, and are always subject to negotiation.

For instance, if you want to sample the synth line from Van Halen’s “Jump”, you would need to secure licenses from the record label (for the master), as well as the music publisher (for the underlying musical composition).

If you decided to re-create the synth part yourself as a music bed, it would still require negotiating directly with the music publisher (if they didn’t decide to reject the use entirely).  Unlike a mechanical license, sample usage is not governed by a compulsory license and requires directly negotiating with all parties.  The cost can range from cheap (gratis) to costly depending on the sample(s) being used.   Without licensing from the appropriate copyright owners, you are liable for copyright infringement and can be sued for substantial sums of money.

Record labels and music publishers alike have in-house licensing contacts who handle such requests (some even having online forms). There are several agents and legal consultants who specialize in sample clearance and can assist if you choose to hire one.

Using a Public Domain Work:
Public domain, like sampling, is also a complex area in the licensing world.  Public domain works (as they relate to music) are compositions that are not under copyright or whose term has expired. While a composition may have fallen into the public domain, an arrangement of that composition that possesses sufficient originality may be considered a new composition and thus, protected by copyright.

If you decide to record your own version of a public domain composition, you would not need to secure a mechanical license or pay royalties, unless you are using a copyrighted arrangement of that song. A simple rule of thumb — if you used sheet music to learn it, then you will need to secure a license. You can often find the basic copyright information on the sheet music..

Holiday music is the area where most questions arise. Many classic Christmas songs that are presumed to be in the public domain are in fact copyrighted, so make sure to double-check your sources before deciding a track is in the public domain. Like sampling, public domain is also an area where it is often best to consult a legal expert before distribution.

PD Info Online (www.pdinfo.com) is a good starting point if the liner notes and copyright information are unavailable. Searching the ASCAP repertory (www.ascap.com/ace) will also produce valuable contact details in determining whether a work is protected or not.

The licensing world of cover songs, mechanical licenses, sample clearances, and public domain may contain complex rules and regulations for the casual music creator, though one adage holds true: If you ever have a question — don’t be afraid to ask!  Please visit the Limelight site (www.songclearance.com) — and specifically our FAQ section (www.songclearance.com/page/faq) — for additional information and answers to many other questions concerning mechanical licensing.

At RightsFlow (www.RightsFlow.com), we’re helping artists, labels, distributors and online music services to license, account and pay songwriters and publishers.

Designed by musicians for musicians, Limelight (www.songclearance.com) is a simple way to clear any cover song.  Are you ready to clear a song for your release?  Get started and create a free account today!

SOURCE:
How You Can Clear Cover Songs, Samples, and Handle Public Domain Works


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