It’s official: American songwriters “suffer a blow” in the decision of the decree of consent
The US Department of Justice has officially completed its review of ASCAP and BMI consent decrees in the United States – hammering publishers and songwriters in the market, and festive news for people like Pandora.
DoJ’s final decision does not propose any changes to the 75-year-old consent decrees.
In what is considered the most damaging outcome, the DoJ ruled that ASCAP and BMI must agree to a 100% license – meaning that if a licensee erases a track with a writer (and / or his PRO), he doesn’t need to bother to do it with his co-writers (and / or their PRO).
This disrupts the long-standing practice of the split-licensing industry in the United States, creating logistical and legal challenges for rights holders.
“We are extremely disappointed with the DoJ’s decision to publish an unprecedented and erroneous interpretation of the consent decrees.”
Martin Bandier, Sony / VTT
With any chance of convincing the DoJ to change its mind now, figures in the US publishing industry say they are turning their attention to legal lobbying – and Congress.
Sony / ATV CEO and Chairman Martin Bandier (pictured) said in response to today’s decision: Has worked for many decades.
“Not only does this contradict the views of the US Copyright Office and the music industry as a whole, but it will bring significant uncertainty and chaos to a market that has functioned well for years, while leaving all the world in the licensing process, including songwriters, to try to figure out how 100% licensing might work.
âInstead of modernizing consent decrees, this ruling created a host of issues that will now need to be addressed by the courts and must also be addressed by Congress. “
The DoJ’s 22-page decision (which you can download here), however, offered editors a silver lining.
She admits that the approval decrees have “an intrinsically limited scope” and that “a more comprehensive legislative solution may be possible and preferable”.
The DoJ also notes “the incongruity in monitoring the licensing of performing rights and other copyrights in compositions and sound recordings” – a reference to the fact that labels and artists are free to negotiate their primary rights with streaming services directly.
The DoJ suggests that âthe protections provided by consent decrees could be addressed through a legislative solution that would place the licensing of performing rights under a regulatory framework similar to that of other rightsâ.
In response to the DoJ’s decision, ASCAP and BMI are joining forces in a combined lobbying effort.
BMI is taking legal action and has started the process to challenge the 100% license in Federal Court. At the same time, ASCAP announced that it would pursue a legislative solution to ensure the continued availability of split licenses as well as other recourse to the regulations of the consent decree.
Mike O’Neill, President and CEO of BMI, said: âThe DoJ’s interpretation of our Consent Decree serves no one, not the market, music publishers, music users and most importantly. again, not our songwriters and songwriters who now have the government weighing in on their creative and financial decisions.
âUnlike the DoJ, we believe our consent decree allows for fractional licensing, a practice that encourages competition in our industry and fosters creativity and collaboration among music creators, a factor that the DoJ has completely rejected.
“The DOJ’s interpretation of our consent decrees serves no one.”
Mike O’Neill, IMC
âAs a result, we have no recourse but to fight DOJ’s interpretation in court. It won’t be easy, and we know it will take time, but we believe it is the right thing to do and in the best interests of the industry as a whole.
Elizabeth Matthews, CEO of ASCAP, said: âDOJ’s move puts the United States completely out of step with the wider global music market, robs American music creators of their rights and potentially disrupts the flow. music without any benefit to the public.
“That’s why ASCAP will work with our allies in Congress, BMI and leaders in the music industry to explore legislative solutions to challenge the DOJ’s 100% licensing decision and pass the changes that will protect authors. – composers, songwriters and the music we all love. “
“The DOJ’s decision puts the United States completely out of step with the wider global music market.”
Elizabeth Matthews, ASCAP
The DoJ wrote in its statement on 100% licensing: âAs our investigation progressed, we discovered that there was significant disagreement in the industry over which rights should be conveyed by blanket licenses. (as well as other categories of licenses) that the consent decrees. require ASCAP and BMI to offer.
âSome have argued that in order to achieve the purpose of consent decrees, the general license must grant licensees (also known as ‘users’) the right to perform publicly all songs in the ASCAP and BMI repertoires.
âOthers believe that the blanket licenses offered by ASCAP and BMI instead only confer rights to fractional interests in songs owned by ASCAP and BMI members and that music users should obtain separate licenses for the remaining fractional interest before playing the songs.
He concluded: “We believe the evidence favors the full-work side.”
Some say the blame for the decision must at least partly fall on the music industry’s weak lobbying efforts.
“This is a classic example of the law of unintended consequences at work,” an expert told MBW. âASCAP and BMI bought their own kool-aid and never thought about what might happen if they asked the DoJ for consent decree regimes.
âThey just thought they could get something on the withdrawal. It was a very bad strategic choice in retrospect for PROs – and a very good one for lawyers who will be arguing this across the country for years to come.
Here is one of those lawyers.
Paul Fakler is an entertainment lawyer at Arent Fox, which represented a few different types of broadcasters in the DOJ review (terrestrial, cable and satellite radio).
He told MBW: âAfter spending more than two years investigating the operation of the ASCAP and BMI antitrust consent decrees at the request of music publishers, the Department of Justice has finally released its official closing statement for this. investigation.
âThe statement convincingly and convincingly explains why consent decrees remain vital and crucial to the fair functioning of music performing licenses in the United States. The statement also explains why the DOJ was unable to conclude that the various changes requested by music publishers were in the public interest.
âFinally, and in contrast to the constant stream of hyperbolic misrepresentation made in the press by the music publishing industry, the DOJ makes it clear that, based on its investigation of historical industry practices, the express provisions of the PRO songwriters’ agreements, as well as as a legal precedent for consent decrees, these decrees have always required ASCAP and BMI to license each entire song in their respective repertoires and ASCAP and BMI have in fact always offered such licenses. ‘
“Without [100% licensing], PROs would likely be subject to an antitrust liability per se for pricing. “
Paul Fakler, pro-broadcasting lawyer
He added: âThe statement makes it clear that nothing should change based on the DOJ’s confirmation of the entire license requirement, as all commercially significant licensees have always been licensed from the ASCAP, BMI and SESAC.
âWhile all three offer full work licenses, they have historically charged fees based on their respective fractional performance and distributed royalties to songwriters on a fractional basis. There is simply nothing wrong with songwriters in continuing this practice, which has been in place for decades.
In addition, as the DOJ makes clear in the statement, the license of the entire work, which is necessary to allow users to make immediate and unplanned use of every song in a PRO’s repertoire, is the One of the main pro-competitive advantages of the Supreme Court, held to counterbalance the inherently anti-competitive characteristics of collective licensing through PROs.
“Without it, PROs would likely be subject to an antitrust liability per se for pricing.”
NMPA President and CEO David Israelite said, âThe Department of Justice (DoJ) has dealt a heavy blow to American songwriters.
âAfter a two-year review of the consent decrees that govern ASCAP and BMI, career lawyers who have never been elected or confirmed to their posts, led by an attorney who previously represented Google, determined that the Songwriters should have even fewer rights, less control over their intellectual property, and be treated more unfairly than they already are.
âThe department has ignored the voices of copyright experts, members of Congress and thousands of songwriters and offered a huge giveaway to tech companies that are already enjoying extremely low prices.
“The DoJ has dealt a heavy blow to American songwriters.”
David Israelite, NMPA
âThe interpretation that consent decrees require all works to be 100% licensed is both unprecedented and disastrous for the songwriting community. The ruling represents a misunderstanding of copyright law and directly violates legal guidelines given by the Copyright Registry. The challenge displayed by these career antitrust lawyers in ignoring the legal advice of the Copyright Registry is shocking.
âThe bureaucrats in Washington shouldn’t be concerned with regulating music because they are neither able to understand nor to solve the problems they have created.
“We hope that through the legal process, the conversations with members of Congress who understand copyright law and, ultimately, the voices of those most affected, the creators themselves, we can find a way forward. “
In a pre-petition letter to Federal Judge Louis Stanton, BMI informed him of a proposed petition to interpret and possibly modify its consent decree.
More specifically, the letter requests the following redress:
- Determination that BMI’s consent decree permits the industry’s long-standing practice of fractional licensing, or,
- Alternatively, a court order amending the decree to allow the granting of split licenses;
- A reasonable transaction period after a final decision, if compliance with the DOJ interpretation is required.
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