Justice Dept. Recommends Consent Decrees, '100% Licensing'
Music Industry, Publishers Criticize Decisions
June 30, 2016 at 4:07 PM (PT)
The JUSTICE DEPARTMENT decided to maintain a decades-old system that requires royalty collection societies ASCAP and BMI to license songs to everyone at a fixed rate, FORTUNE reports. The DOJ has been mulling recommendations that it change or end consent decrees, which were started over 75 years ago as a way to stop antitrust abuse by the music industry.
As it is, ASCAP and BMI —- which serve an one-stop shops to obtain performance rights -— must issue a license to any radio station, restaurant, or other business that wants to play a song in public. ASCAP and BMI, representing big music publishers, believe the consent decrees are essentially obsolete, and urged the DOJ to tear up the consent decrees. Other parties, believe the rules are necessary to prevent monopoly-style abuses and to ensure fair access to song licenses.
BMI Pres. MIKE O’NEIL released the following reaction: “We are disappointed with the DOJ’s recommendation, which after years of hard work and discussion brings us no closer to much-needed consent decree reform than when we started,”
Complication matters for the publishers and music industry is a JUSTICE DEPT. demand for what's been called “100% licensing.” This would impact songs with multiple songwriters, forcing ASCAP and BMI to provide a license to the whole song and apportion the payment among the different writers. This could potentially complicate the royalty payment process for those songs exponentially.
The DOJ decisions is not the final say; a U.S. federal court will ultimately make the call. BMI and ASCAP are expected to urge a judge to reach a different conclusion, even though the court usually sides with the government.
If these setbacks to the music industry stands, industry interests will likely ratchet up its efforts in CONGRESS to change copyright law. The lobbying was visible last week when TAYLOR SWIFT and other music A-listers kicked off a PR campaign that alleged the law unfairly favors YOUTUBE and other streaming services.