PRO Licensing Rights Remain Key Issue in Consent Decree Review Comments
The licensing rights of performing rights organizations (PROs) continued Wednesday to be a point of emphasis in comments for the Justice Department consent decree review (CD Aug 6 p7; Aug 4 p12). NAB asked DOJ to bar PROs from selectively licensing to certain licensees with the threat of catalog withdrawal (http://bit.ly/1ogM9mn). The Information Technology and Innovation Foundation (ITIF) said PROs should be allowed to license additional types of licenses beyond performance rights (http://bit.ly/1oDNmUe). The National Music Publishers’ Association (NMPA) criticized the Future of Music Coalition (FMC) for disputing (http://bit.ly/1s8RKxq) NMPA’s position that direct negotiations, as opposed to consent decrees, would benefit songwriters.
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DOJ’s Antitrust Division is reviewing the existing consent decrees for PROs American Society of Composers, Authors and Publishers (ASCAP) and Broadcast Music Inc. (CD June 5 p9). Comments on the review, which were due Wednesday, are not expected to be publicly available until next week, said an official associated with the review.
Consent decrees are “essential” and shouldn’t be “diminished,” said NAB. The decrees “provide important protections against the inherently anti-competitive features” of PROs, it said. “The blanket licensing of performance rights is inherently anti-competitive because the very nature of the PROs’ blanket license involves the fixing of a single price for all music, irrespective of which songs are actually used.” The decrees shouldn’t be “amended to allow the PROs to discriminate against certain licensees by allowing music publishers to selectively withdraw their catalogs with respect to some licensees but not others,” it said. If amended, consent decrees should “require greater transparency with respect to the PROs’ repertories,” said NAB.
The uniform rates for all songs established in the original 1941 consent decrees were for a “pre-computer world,” said Alan McQuinn, ITIF research assistant and principal author of its comments, in an interview. There should be “dynamic pricing” to reflect the contemporary music licensing landscape, he said. McQuinn said the comments were written from a “neutral” policy perspective. PROs should be able to license mechanical and synchronization rights to “further simplify the complex” music licensing system, commented ITIF. It wants a “one-stop-shop” music catalog so “potential licensees would be free to find and pick what licenses they wish to purchase, and third-party developers could build applications on top of the PRO’s databases to facilitate music licensing.” DOJ should “consider either arbitration or creating a means by which rate courts can expedite their decisions,” it said.
The FMC “refuses to reveal who funds” it and “continues to undermine what’s in songwriters best interest with fear mongering that ultimately benefits the technology companies who profit off of archaic consent decrees,” said NMPA in a statement. “The result of current BMI and ASCAP consent decree restrictions is not simply below-market rates for songwriters and publishers, but an inability to utilize what is fundamentally a free market right in a manner determined by the rights holder to be best."
"The interests of the multinational corporations that own the major publishers may sometimes align with ‘what’s in songwriters’ best interest,’ but certainly not always,” said FMC in a statement. “On those occasions when NMPA does the right thing for songwriters, we'll even defend them from unfair criticism,” but when NMPA’s “position puts songwriters at risk, we say that too,” it said. “Rather than engage our actual arguments about benefits of the consent decrees and songwriters’ continued need for transparency, direct payment, and guaranteed splits,” NMPA resorts to “aggressive ad hominems,” said FMC, saying it would prefer to work with NMPA on issues of agreement. FMC isn’t “alone” in its “concern” over the “biggest publishers crippling the PRO system and disadvantaging indie-affiliated songwriters by robbing them of negotiating leverage,” it said.