In Music Law, Chapter 15 (Taking Your Band Online), and in Getting Permission, Chapter 5 (Getting Permission to Use Music), we state that, "Music publishers currently seek to get paid in two ways (referred to as double-dipping), once for the reproduction of the MP3 file and again for the transmission of the file over the Internet."
This statement is outdated. In 2007, a federal district court held:
"Although we acknowledge that the term perform should be broadly construed [cite omitted] we can conceive of no construction that extends it to the copying of a digital file from one computer to another in the absence of any perceptible rendition. Rather, the downloading of a music file is more accurately characterized as a method of reproducing that file."
In other words, the court held that double-dipping is improper and that public performance rights do not need to be acquired when providing digital downloads. Recently, music publishers petitioned Congress to revise the copyright law and still apparently believe they are entitled to public performance payments. However, their desires have not yet been transformed into law. We'll report if and when things change.