Should One Co-Writer Have the Power to License a Collaborative Work?

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Martin Bandier, Chairman and CEO of Sony/ATV, sent the following letter to the company’s songwriters in Nashville. Bandier urges songwriters to go to the NMPA town hall meeting this week.

The meeting will cover changes being considered in Washington. Bandier says the DOJ is considering introducing 100% licensing for ASCAP and BMI. He says: “This is a complicated subject but it basically means that if either of these PROs controls any part of a song, no matter how small, they would be required to license the entire song without the approval of those who control the remainder.”

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To our Nashville based songwriters:

As you know we are in the midst of a complex and lengthy process to address the issue of the below market royalty rates that our songwriters are subject to in the rapidly growing streaming music market. I am personally spending a great deal of my time dealing with this matter and Sony/ATV has been and remains at the forefront of efforts to ensure that you are fairly compensated for your essential contributions to streaming services.

I am sure you will agree that there is nothing more important right now for songwriters than addressing this issue.  That is why I am urging you to attend a Songwriter Town Hall meeting that the National Music Publishers Association (NMPA) is holding in Nashville on September 9.  The purpose of the meeting is to update you on changes that are currently being considered in Washington that if implemented will have a profound impact on long standing licensing practices and the royalties you earn from your songs.

As I have communicated to you previously, the Department of Justice (“DOJ”) has undertaken a review of the consent decrees that govern how ASCAP and BMI operate and how the royalty rates you are subject to are set. We have been deeply involved in the DOJ process for over a year, pursuing changes to these consent decrees which are more than 70 years old and were not designed for a music market that is becoming increasingly dominated by streaming services.  While we remain hopeful for a positive outcome to the DOJ review, this process has taken an unexpected turn in recent weeks that, if not addressed, could have a significant impact on your earnings as well as restrict how you work creatively.

The DOJ is considering requiring ASCAP and BMI to engage in what is called 100% licensing.  This is a complicated subject but it basically means that if either of these PROs controls any part of a song, no matter how small, they would be required to license the entire song without the approval of those who control the remainder.

For example, you may have written a song with a writer affiliated with a different PRO.  Under 100% licensing, a streaming service could bypass you and your PRO and go to your collaborator’s PRO to obtain a license for the entire song without your consent. You would then be subject to that PRO’s royalty rate, even if it is lower than your PRO’s rate, and you may have to depend on the other PRO, with which you have no relationship, to collect your share of royalties and account to you.

This would substantially disrupt the well-established practice of licensees entering into agreements with each PRO representing whatever piece of a song they control and create significant accounting inefficiencies as PROs would have to pay royalties to songwriters not affiliated with them.

Under this scenario, songwriters might reconsider who they write with.  Would you want to collaborate with someone signed to a different PRO if it meant you would be subject to a lower royalty rate?  In addition, how would a writer whose song is licensed by a PRO that he or she is not affiliated with have any assurance that their royalties would be properly paid or paid at all?

These potential changes go to the heart of how performance rights have historically been licensed and how songwriters have always been paid. Requiring PROs to grant 100% licenses would be an unprecedented change to well-established licensing practices create widespread administrative confusion and potentially undermine a songwriter’s relationship with his or her chosen PRO.

This is why I am urging you to attend the NMPA event where I am sure you will gain a greater understanding of these complicated issues and learn how you can potentially help.

If you would like to discuss this issue further or have any questions following the meeting please don’t hesitate to contact us. I look forward to seeing you there.

Regards,

Martin Bandier
Chairman & CEO
Sony/ATV Music Publishing

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13 Responses

  1. Adam

    Compulsory licensing for songs and music sales would be the best thing that happened to music sales/licensing since maybe ever… It would create endless channels for exchanging music legally and with profit/money exchanging hands too. It would take the power away from the likes of the labels and put it more in the hands of musicians. But it’s not entirely clear that is what is being proposed… ?

    Reply
    • Musicservices4less

      Adam, it is very clear what is being proposed. Please research this issue and educate yourself. It is all available on the internet. If you want to intelligently comment on this matter you need to do that.

      Reply
  2. Rickshaw

    Similar to a check written to two people, a safe deposit box under two names, etc. you should need both (all) parties to approve something.

    Reply
  3. Musician Who Understands

    The headline – “Should One Co-Writer Have the Power to License a Collaborative Work?” – indicates how far from actually understanding the very issues the folks here at DMN supposedly report about really are.

    Nina (and “Rickshaw” above) completely misunderstand U.S. copyright law. Under the law – it already is the case – that any co-writer has the power to fully license an entire song, on behalf of all other co-writers. Songs that are jointly created are owned by ALL authors, with each having an “undivided interest” in the ENTIRE copyright.

    The DoJ isn’t proposing a change in the law. They are saying ASCAP should follow it.

    What they are really saying to ASCAP (and at least signalling to BMI, for now, as well) is that the practice of not respecting that undivided interest is inherently anti-competitive. If every radio station and digital music service HAS to get a license from ASCAP, BMI AND SESAC – because, regardless of the law, none of them will license an entire work (or reveal what portion of any songs that any of them have the rights to) – then there is effectively NO competition among them.

    Reply
    • TheKJBs

      That is absolutely correct. However, the law is already being largely ignored when it comes to say, sync licensing, (partly because of a lack of understanding of copyright law among music business professionals and songwriters alike) because there is a stigma attached to associating the work with picture (and the ideas, messages, brands, etc therein), and potentially coming under fire publicly from the spurned rights holder, or by potentially losing out on future business by not entering into negotiations with all parties (i.e – if you had a work published by Sony/ATV and Warner-Chappell, but only negotiated with Sony, you might have a much harder time trying to license a W-C work in the future).

      So point being: There is perhaps more of a flaw to copyright law, and the protections it allows rights holders. If someone doesn’t want to enter their ownership stake into a negotiation, they should not be required to. At the very least not without proper oversight. Right now, that’s one of the myriad benefits in membership with a PRO.

      If copyright law is not changed, or if this moves forward, and if you have a % of any work on a Sony/ATV composition, and no publishing deal, you can expect a deal memo on your desk shortly.

      Reply
    • Musician Who Understands

      TheKJBs

      So point being: There is perhaps more of a flaw to copyright law, and the protections it allows rights holders. If someone doesn’t want to enter their ownership stake into a negotiation, they should not be required to. At the very least not without proper oversight. Right now, that’s one of the myriad benefits in membership with a PRO.

      It’s not a “flaw” in the copyright law. It is a very basic tenet of joint ownership, which concept is not unique to copyright. It applies in various other areas of the law (partnerships, trusts, etc.) as well. Finally, it is a very, VERRRRY, longstanding attribute of copyright law. So, point being: It is not likely to be changed, any time soon.

      It is why we see the contractual provisions in record and publishing agreements, that effectively supercede the basic function joint, undivided interest of copyright law.

      But much more importantly, you totally avoided the final, fundamental thrust of my post, which is that the DoJ has determined – correctly – that if the PROs don’t license 100% of the rights to split works among them, and instead require ALL licenscees to license ALL works, from ALL of them, then the PROs are effectively not competing with each other.

      DoJ’s analysis is 100% correct here. ASCAP and BMI are supposed to be competing with each other for licenscee business, but the reality is that licensees HAVE to get a license from both of them (even for the many songs that are in BOTH of thier catalogs). There is NO competition, between them.

      Reply
      • Troglite

        Just wanted to express my appreciation for this thread. Thanks for sharing your knowledge ans insights on this topic!

        Reply

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