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Time for music licensing to meet the 21st century

For consumers, the digital age means accessing music anywhere, anytime at a very low cost (or free) but the picture isn’t so rosy for those who actually make their living writing and performing music.  Everyone acknowledges that online piracy was the first tsunami to hit the music industry, but now, though legal, the rise of streaming services like Pandora and Spotify have served to further undermine creators via an antiquated and utterly lopsided licensing system.   While most consumers remain blissfully unaware of the complexities of the music licensing maze, those who depend on it for their paycheck are acutely aware that it’s in dire need of an update. In the eye of the storm sit nearly 75-year-old “consent decrees” that determine how rates are set for various forms of music licensing.  With the advent of online streaming, those who make their living creating music have found that the outdated decrees have hamstrung their ability to earn a living in the digital age. As  William McConnell  explains in his piece Copyright debate has new tune in the age of streaming” published on thedeal.com:

Artists and the publishing industry say the system needs to be revamped with the advent of digital delivery technology that has devastated sales of traditional CDs. That trend has intensified as listeners increasingly rely on streaming services like Pandora, Spotify, Grooveshark and Beats Music rather than on digital song-purchasing services like Apple Inc.’s iTunes, which pay artists and publishers significantly higher fees. The shift has cut into artists’ earnings from recording music.

The Antitrust Division of the Department of Justice has opened a review of ASCAP and BMI Consent Decrees and is soliciting public comments.  ASCAP President and Chairman Paul Williams issued this statement on the review:

We are gratified by the Department of Justice’s decision to open a formal review of the ASCAP and BMI consent decrees. Since the ASCAP decree was last reviewed in 2001 – before even the iPod was introduced – new technologies have dramatically transformed the way people listen to music. ASCAP members’ music is now enjoyed by more people, in more places, and on more devices than ever before. But the system for determining how songwriters and composers are compensated has not kept pace, making it increasingly difficult for music creators to earn a living.

ASCAP remains committed to working with the Department of Justice and all industry stakeholders to modernize the music licensing system so that it better serves songwriters, the businesses who depend on our music and the people who listen to it – not just today, but for generations to come. Updating music licensing regulations to reflect the realities of today’s music landscape will preserve the benefits of collective licensing to businesses that license music, give consumers greater access to the music they love and allow the more than 500,000 songwriters, composers and music publishers we represent to be compensated for the true value their music brings to the marketplace.

With the deadline on August 6th for public comments fast approaching, it’s crucial that songwriters and those who support them speak up on the issue.  As musician David Lowery explained in a call to action, published today on The Trichordist:

The DOJ is reviewing the WWII era consent decrees that force songwriters under federal court supervision for supposed anti-competitive practices.  Yes the awesome power of the federal government is being used to protect multi-billion dollar companies like Clear Channel, Sirius, Pandora, YouTube/Google, Amazon and Spotify from hippy freak songwriters. Considering that many of these companies are effective monopolies it’s a stunning abuse of federal power on behalf of a few politically connected corporations. The consent decree forces songwriters to allow these services to use our songs while a single appointed for life judge (song czar) makes arbitrary sets our rate of compensation.   You may remember that I posted that my million spins on Pandora earned me less than $17?  And I can’t even opt out of this service.  How is that even fair?  That’s how this kind of outrage occurs.  This amounts to a government mandated subsidy from songwriters to some of the largest companies in the world. If you are a songwriter, please submit comments.  The DOJ specifically would like to hear from you.  If you don’t’ understand the legalese just make a simple statement about how you feel about the compensation from these digital services that results from these consent decrees. Be passionate but polite. Here are the instructions: http://www.justice.gov/atr/cases/ascap-bmi-decree-review.html

You should check out Lowery’s post to read the complete comments he posted in response to the DOJ solicitation as well but here’s his opening paragraph:

I am an American songwriter, a member of BMI and a member of the bands Cracker and Camper van Beethoven. I’m submitting this comment on my own behalf in opposition to the ASCAP and BMI consent decrees. I believe these government actions essentially are a compulsory license outside of the Congress and take away songwriters’ rights to due process of law.

You can find out more on the DOJ’s review here but here’s an excerpt as to what they are seeking and where to send/email your comments:

Public Comments Are Solicited

As part of its review, the Department invites interested persons, including songwriters and composers, publishers, licensees, and service providers, to provide the Division with information or comments relevant to whether the Consent Decrees continue to protect competition. While Performance Rights Organizations, such as ASCAP and BMI, monitor for unlicensed uses, enforce copyrights against unlicensed users, and administer copyright royalties, the Department is most interested in comments on competitive concerns that arise from the joint licensing of music by Performance Rights Organizations and the remediation of those concerns.

In particular, the Department requests that the public comment on the following issues:

    • Do the Consent Decrees continue to serve important competitive purposes today? Why or why not? Are there provisions that are no longer necessary to protect competition? Are there provisions that are ineffective in protecting competition?
    • What, if any, modifications to the Consent Decrees would enhance competition and efficiency?
    • Do differences between the two Consent Decrees adversely affect competition?
    • How easy or difficult is it to acquire in a useful format the contents of ASCAP’s or BMI’s repertory? How, if at all, does the current degree of repertory transparency impact competition? Are modifications of the transparency requirements in the Consent Decrees warranted, and if so, why?
    • Should the Consent Decrees be modified to allow rights holders to permit ASCAP or BMI to license their performance rights to some music users but not others? If such partial or limited grants of licensing rights to ASCAP and BMI are allowed, should there be limits on how such grants are structured?
    • Should the rate-making function currently performed by the rate court be changed to a system of mandatory arbitration? What procedures should be considered to expedite resolution of fee disputes? When should the payment of interim fees begin and how should they be set?
    • Should the Consent Decrees be modified to permit rights holders to grant ASCAP and BMI rights in addition to “rights of public performance”?

All comments should be submitted by electronic mail to [email protected] by August 6, 2014 and will be posted in their entirety for public review at this web address. Information that parties wish to keep confidential should not be included in their comments. Comments may also be sent, preferably by courier or overnight service, to

Chief, Litigation III Section Antitrust Division U.S. Department of Justice 450 5th Street NW, Suite 4000 Washington, DC 20001

Also worth noting–and supporting–is the proposed Songwriter’s Equity Act, which is an important step toward leveling the playing field and modernizing the music licensing system. It will ensure that songwriters, composers and publishers are fairly compensated for the use of their music.”