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Justice Department Upholds Music Licensing Agreements, Dealing Blow To PROs; NRA Applauds Action

Posted On: 8/5/2016

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TAGS: music licensing agreements, public performance of music, Department of Justice, PROs, ASCAP, BMI, songwriter royalties, National Music Publishers Association, National Restaurant Association

WASHINGTON -- After reviewing its 75-year-old consent decrees that govern how music rights organizations set rates for licensing songs, the Department of Justice is proposing no changes.

"Although stakeholders on all sides have raised some concerns with the status quo, the division's investigation confirmed that the current system has well served music creators and music users for decades and should remain intact," DOJ said in a statement on Aug. 4.

Performing rights organizations ASCAP and BMI have been urging the DOJ to revise, or abolish, the consent decree, first entered into in 1941 as part of antitrust cases. The PROs argued that the changing face of the industry makes significant modifications necessary. Notably, the different ways that consumers listen to music, such as with streaming subscription music services, make it difficult for songwriters to earn a living, they maintain.

The DOJ's antitrust division, which started the review in 2014, vetoed proposed modifications, including those in that would permit fractional licenses requiring additional licenses to perform certain works. Rather, the DOJ directed that the consent decrees require licenses be granted on a "full work" basis. This means that radio and TV stations, digital music services and venues (i.e. bars and restaurants) that license works have the right to publicly perform all works in ASCAP and BMI's repertories.

David Israelite, president and chief executive of the National Music Publishers Association, described the decision as a "disastrous blow" to songwriters. "The Department of Justice has dealt a massive blow to America's songwriters," he said. "After a two-year review of the consent decrees that govern ASCAP and BMI, career lawyers who were never elected nor confirmed to their positions, led by a lawyer who previously represented Google, determined that songwriters should have even fewer rights, less control over their intellectual property and be treated more unfairly than they already are. The department ignored the voices of copyright experts, members of Congress and thousands of songwriters and delivered a huge gift to tech companies who already benefit from egregiously low rates."

Laura Chadwick, director of commerce and entrepreneurship at the National Restaurant Association, applauded the DOJ's actions on music licensing. "Music plays a pivotal role in creating a welcoming environment for diners, but the process of music licensing continues to be a challenge for our membership," she said. "We are pleased that the U.S. Department of Justice will keep the BMI and ASCAP consent decrees unchanged."

The Justice Department has also reaffirmed the concept of 100%, or blanket, licensing, which NRA has advocated for. "Our members have been and continue to be sold blanket licenses, allowing them to play and stream any and all music within a performance rights organization's repertoire," Chadwick said. "Any change to this long-held practice would have created even more complexity for our members when it comes to music licensing."

According to Variety, BMI said that it is taking legal action to challenge 100% licensing, while ASCAP is pursuing a legislative solution. | SEE STORY