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 DOJ consent 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.
Right now, there are intense debates about how much these rates should be, particularly for Internet radio. FMC supports songwriters being equitably compensted for the use of their work on any platform. However, we are very concerned that just a handful of major music publishers are attempting to tilt the playing field in their favor, to the potential detriment of both songwriters and PROs.
ASCAP and BMI are two PROs that operate under certain government-enacted limitations put in place to curb the kind of anticompetitive behavior that publishers and PROs had previously been found to engage in. These tendencies don’t magically disappear with time, especially given the tremendous concentration in the corporate music space. This is why federal regulators are once again scrutinizing the PROs and publishers for evidence of possible collusion.
The zany thing is that this is all happening because the publishers and PROs urged the DOJ to rexamine the consent decrees. That might make some sense, because these rules are pretty old (dating to the 1940s), and the market has evolved considerably since then. But that doesn’t mean that big publishers aren’t potentially inclined to abuse their market power. And that certainly doesn’t mean that songwriters shouldn’t be treated fairly when it comes to their compensation.
It’s hard to say how much of the pressure to eliminate the consent decrees is coming from the major publishers, but our guess is it’s a lot. If they were somehow successful in their quest, it would be a raw deal for small, noncommercial broadcasters as well as songwriters who aren’t named Dr. Luke.
Actually, even Dr. Luke might feel the impact. Without a guarantee of direct payment that isn’t recoupable by the publishers, songwriters of every stripe would be disadvantaged. And the PROs themselves may be weakened. Even if aspects of the consent decrees are preserved, but publishers are allowed to pull partial catalog from PROs (like they want to do with digital), the PROs could end up as the mere administrative drones for just a handful of powerful publishers. Those songwriters and independent publishers who benefit from the blanket licenses provided by ASCAP and BMI would lose tremendous leverage, as the playing field would be tilted to the big publishers who would always be able to score the better deals.
Lastly, there would be a fracturing of the legitimate music marketplace, which is bad for everybody. Smaller AM/FM radio loses, Internet radio loses, songwriters lose and even PROs are in a position to lose.
Is this the kind of future we want?
PROs are important. They provide a valuable service to their songwriter members. They need to figure out the best way to keep that up without bowing to the pressure of just a handful of music publishers. If you feel that way, too, you should let the DOJ know, because they need to hear from you.
[Image via shutterstock.com.]