Recording Academy And Leading Songwriters Ask DOJ To Improve PRO Licensing
Imagine a world in which lone songwriters are regulated by the federal government, while major radio conglomerates and publicly traded tech companies are treated as a protected class.
Welcome to the world of the American songwriter.
Songwriters affiliated with performance rights organizations (PROs) ASCAP and BMI, including thousands of professional songwriter members of The Recording Academy, are paid performance royalties subject to consent decrees, decades-old mandates issued by the Department of Justice. These decrees were originally designed to prevent monopolistic practices that would subject small mom-and-pop radio stations to paying fees they deemed too high. As a result, rather than songwriters and their representative organizations negotiating pricing and licensing agreements based on what creators consider fair compensation and what the market can bear, the mandate-based system requires mandatory rate court proceedings. These proceedings allow the courts to set rates when parties cannot agree.
Decades later, you can imagine how this system plays out to benefit corporations at the expense of songwriters. While technology and music delivery systems have created a sea change within the industry, the consent decrees have not been updated to keep pace. Instead, the consent decrees keep royalty rates paid to the creative class artificially low, while protecting giant corporate radio companies, dominant Internet radio players and monopolistic satellite radio companies. The balance of power has been turned upside down — where once the mom-and-pops asked for protection, now it is those who make music who must be safeguarded.
That is why The Recording Academy, which represents 23,000 professional members, including thousands of composers and songwriters, filed comments with the Department of Justice asking for modifications to these outdated consent decrees. Joining us are six of our member songwriters, representing a cross section of our songwriting community: Darrell Brown, Sue Ennis, Sean Garrett, Lukasz "Dr. Luke" Gottwald, Harvey Mason Jr., and Greg Wells. These successful songwriters — responsible for millions in sales across the rock, pop, R&B, and country genres — want to ensure that a vibrant marketplace will exist in the future, allowing the next generation of songwriters to earn a living from their craft.
So where do we stand on the ASCAP/BMI consent decrees? We propose that the consent decrees be modified so that ASCAP and BMI can continue to serve their (and our) songwriter members and the marketplace. Below are The Academy's proposed modifications:
- Fair Market Rates
Our first concern is that songwriters receive fair market value for the public performance of their work across all media channels and services, from traditional broadcast to digital transmission media. Since ASCAP and BMI are still restricted from negotiating licenses in the free market, modifications to the consent decree should ensure that any alternative rate-setting process results in royalty rates still approximate to what would have been negotiated in the free market.
Modifications to the decrees should provide for the most efficient licensing process possible, so that the process is quick and inexpensive to creators and provides them fair and timely compensation. In the absence of free-market negotiations, an alternative could be an arbitration process that would streamline the rate-setting process in a manner that is faster, more cost-effective, and that produces results that are more reflective of the current marketplace when compared to the current rate court process.
- Bundling Rights
Further, The Academy supports allowing rights holders to grant the PROs rights in addition to public performance rights, such as mechanical rights.
- Partial Rights
Finally, we also believe that ASCAP and BMI's members should be able to grant those organizations partial rights, as the current "all or nothing" restrictions could lead to complete withdrawal to the detriment of songwriters.
Songwriters and composers create the very DNA of the music we love. If they cannot make a viable living from their creative work, the music we love is at risk and the entire marketplace could collapse. The PROs must have the ability to modernize so that they can continue to protect songwriters and secure fair market value for creative work. The consent decrees must allow the PROs to do this.