You may have heard that the United States Department of Justice (DOJ) is investigating potential anticompetitive behavior by major music publishers and Performing Rights Organizations (PROs), which collect and distribute royalties to songwriters and publishers for the performance of musical compositions. These “blanket licenses” are made possible by DOJconsent decrees and cover all forms of broadcast as well as concert venues or other establishments that publicly perform music (think bars or restaurants).
Make no mistake, PROs are crucially important to songwriters. They provide leverage to artists who wouldn’t otherwise have it in rate negotiations with music services; they pay their songwriter members directly under fair splits (50-50 between artist and publisher); and they allow music to be efficiently licensed to AM/FM, Internet and satellite radio, which means listeners have more opportunities to hear music, and songwriters have more opportunities to get paid.
In 1941, “Chattanooga Choo-Choo” was the biggest hit in the land, thanks to — what else? — the radio. Radio’s popularity owes much to songs like this — and the songwriters and publishers who enabled us to hear them. Back then, the balance of power in the music industry was tilted towards the performing rights groups ASCAP and BMI, organizations that acted as gatekeepers to the world’s most valuable musical repertoires — so much so that the US Department of Justice took action that same year to balance the scales: read more.
There’s been a lot of back-and-forth regarding a recent court ruling that maintains the current royalty rates paid by Internet radio company Pandora to ASCAP, a 100 year-old performing rights organization (PRO) that collects money for AM/FM and Internet radio play then distributes that revenue to songwriters and publishers.
In the coming days, we hope to offer varying viewpoints from individuals and groups in this ecosystem. For now, we’ll try to demystify this decision and the licensing frameworks that informed it.
Payola has been the radio and music industry’s dirty secret for decades. While the Federal Communications Commission avoided taking action on payola, leaders like Commissioner Jonathan Adelstein, Senator Russ Feingold and then-New York State Attorney General Eliot Spitzer pushed for progress.
Now, the FCC is reported to be on the brink of pushing through a negotiated consent decree with the broadcast industry. This consent decree could bring to an end the broad investigation that the FCC announced in the aftermath of the Spitzer investigation.
Future of Music Coalition strongly believes that any successful settlement must have three components: read more