More Negotiating Options Needed for Publishers, Creators, Say BMI, Music Attorneys on Consent Decree Review
The Justice Department consent decree review should result in an improved negotiating posture for songwriters, music publishers and performing rights organizations (PROs), said Broadcast Music Inc. (BMI), songwriters and music attorneys Tuesday. The Future of Music Coalition (FMC) doubted whether the abolition of consent decrees would help independent songwriters and publishers, in comments (http://bit.ly/1s8RKxq) posted Tuesday. DOJ’s Antitrust Division is reviewing the existing consent decrees for PROs American Society of Composers, Authors and Publishers (ASCAP) and BMI (CD June 5 p9). Comments on the review are due Wednesday and are expected to highlight a divide between the music industry and broadcasters (CD Aug 4 p12).
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Digital rights withdrawal, bundling rights and a binding arbitration model were the three desired updates BMI suggested for the consent decree process, in a Tuesday news release (http://bit.ly/1say4G4). Music publishers should be allowed to give BMI the “right to license works for certain uses, while permitting publishers to retain the exclusive right to license works for other defined, digital uses,” it said. BMI should be allowed to “license not just the public performing right, but any rights relating to the musical work that a music user needs to bring its product or service to the public,” it said. Rate-setting disputes should be settled through a binding arbitration model, rather than specially appointed courts, it said. “Music users will be assured of a rate-setting mechanism to resolve disputes, but one that’s quicker and less expensive for all parties,” it said. “Additional important modifications” are “necessary to modernize the decree,” but the proposals “are the most urgent” and “need to be addressed on a faster timetable,” said Stuart Rosen, BMI general counsel.
The Computer & Communications Industry Association’s (CCIA) comments will “emphasize the importance of transparency about what’s in a PRO’s repertory,” emailed Matt Schruers, vice president-law and policy. CCIA members include Dish Network, Google and Pandora (http://bit.ly/WZtLUG).
"Songwriters are severely prejudiced by the antiquated consent decrees,” said Dina LaPolt of LaPolt Law, an IP and entertainment firm, in draft comments advanced to us. LaPolt called for the abolition or significant modification of consent decrees to “reflect the modern licensing landscape.” The streamlining of music licensing “must maintain the music creator’s right of approval,” she said, saying music licensing to third parties is a “secondary” issue next to the consent decree process. Music licensing organizations should be able to “administer any or all” of the rights of creators, “so long as creators have the choice whether or not to participate,” LaPolt said.
In the absence of consent decrees, “songwriters, noncommercial broadcasters, independent publishers and emerging services will face high barriers to entry and potentially endure anticompetitive behavior from the major publishers and their functionaries,” commented FMC. “We know firsthand that consent decrees and the blanket licensing system they enable have clear benefits, particularly to indie publishers and songwriters,” said Casey Rae, vice president-policy and education, in a statement. “Given the rampant ownership consolidation among major music publishers, it is more important than ever” that the “benefits” of consent decrees be “maintained,” he said. The National Music Publishers’ Association (NMPA) argues that “songwriters lose millions a year because of their inability to negotiate free market rates,” but “there is no guarantee that rates negotiated outside of the Consent Decrees will be paid to the songwriters directly or in a 50/50 split,” FMC said.
"To remove the confusion, uncertainty, and inequity that plague music performance rights licensing,” the NMPA made three recommendations, including the arbitration model similar to the one offered by BMI, in a draft comment summary advanced to us. “Any arbitration or judicial proceeding should be required to take into account market-negotiated rates as benchmarks,” it said. NMPA asked that music publishers be allowed to negotiate “directly digital distribution rights.” Consent decrees should be allowed to “sunset or provide for automatic periodic assessment of their continued necessity,” it said. Consent decrees should at least have an “automatic periodic assessment of their continued justification based on the structure of the licensing market,” said NMPA.
ASCAP’s and BMI’s consent decrees are “oppressive” and “essentially are a compulsory license outside of the Congress” that removes “songwriters’ rights to due process of law,” said David Lowery, a songwriter and business lecturer at the University of Georgia, in DOJ comments advanced to us. Lowery temporarily disrupted a June congressional briefing on consent decrees (CD July 23 p15; July 22 p9), when he threw bags of T-shirts at panelists from CCIA, NAB and the Digital Music Association. Said Lowery: “Consent decrees violate the American social contract for many reasons.”