Songwriter Groups Have a Little Advice About Consent Decrees
Posted at 4:29 p.m. on June 9, 2014
Among the various issues at tomorrow’s House Judiciary subcommittee hearing on music licensing will be the question of whether and how the Justice Department should modify its decades-old consent decrees with performing rights organizations.
The Justice Department’s Antitrust Division recently announced that it would review its 1941 consent decrees with Broadcast Music Inc. (BMI) and the American Society of Composers, Authors and Publishers (ASCAP), two organizations that license music on behalf of songwriters. The decrees govern how those two groups operate.
BMI CEO Michael O’Neill says in his written testimony that publishers should be able to license through BMI for certain uses instead of an “all in” or “all out” approach decided by the rate courts that resolve fee disputes.
“If forced into an all-or-nothing choice, publishers could be compelled to turn their backs on the efficiencies and value that BMI brings to wide swaths of the music licensing market in order to explore market opportunities for digital music rights,” he says.
He also says that the rate courts should be replaced with arbitration:
In short, the BMI rate court (and the parallel ASCAP rate court) federal litigation process has become unwieldy, expensive and slow, and it has produced what we believe are below-market rates that are not responsive to changes in the value of repertoire.
Arbitration, O’Niell says, would be “faster, less expensive, and a more market-responsive mechanism for all parties to obtain fair, market-value rate decisions.”
The consent decrees result in “below-market compensation” for songwriters and publishers, says David M. Israelite, head of the National Music Publisher’s Association.
And the current royalties that digital webcasters pay “cannot sustain songwriters who are trying to pay their rent and put food on the table for their families,” Israelite says in his written testimony.
They’re looking for the Justice Department to entirely lift the consent decrees or significantly change them so that “publishers can continue to affiliate with ASCAP and BMI without having to sacrifice fair market compensation.”
But it’s the “constraints” in those consent decrees that have been the “primary catalyst” in providing local television stations “relief from the monopoly pricing power otherwise possessed by these collectives,” says Willard Hoyt, executive director of the Television Music License Committee, in his testimony.
“Any reforms that weaken the current consent decree and rate court systems would be a step backward toward greater inefficiency and PRO market abuse,” Hoyt says.
The Digital Media Association’s Lee Knife brings up similar competition concerns, saying in written testimony that in the “area of competition, the need to protect licensees from anti-competitive behavior may be greater now than in any time in history, due to the recent consolidation in the recording and music publishing industries.”
Before any modifications to the consent decrees, “we strongly urge policymakers to review the history of the ASCAP and BMI consent decrees… and also recent federal court cases which have made note of continuing anti-competitive behavior carried out by various parties acting on behalf of the music publishing industry.”
The full testimonies can be found here.