AIMP, A2IM and CMPA: This Position By The DoJ on 100% Licensing is 100% Wrong

AIMP, A2IM and CMPA: This Position By The DoJ on 100% Licensing is 100% Wrong
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“If we value music, we need to value those who create it.”

Below is a statement from Michael Eames, President of AIMP, Richard James Burgess, Ph.D., CEO of A2IM and Jodie Ferneyhough, President of CMPA regarding the DoJ position on 100% licensing.

“We, the undersigned, represent the independent music publishing and record label community in North America, and want to lend our unified voice to the recent press and discussion regarding the outrageous position the Department of Justice (DoJ) has taken with regard to the ASCAP and BMI consent decrees.

The heart of the music business is the song.  No recording artist would exist without a song, and songs would not exist without songwriters.  The songwriters are the smallest of small businesses, and many of them control the ownership to their songs.  A significant number of songwriters have entered into mutually beneficial agreements with music publishers who develop and promote their songs.  The independent music publishing and record company sector is over one-third of the music industry in North America and employs thousands.  While each company may vary in size and have relationships with major labels and/or music publishers, they all share the same independent DNA.  The vibrant, diverse and dynamic music business we know today was built by songwriters, independent music publishers, and independent record labels… but that’s all about to change.

After spending a great deal of U.S. taxpayer money the last few years reviewing the 75-year-old consent decrees, holding public testimony on the various ways in which the anachronistic consent decrees should be updated to address the challenges of a digital economy, and apparently ignoring hundreds of public comments officially submitted to them, the DoJ determined both that the consent decrees should not be amended and that ASCAP and BMI should be forced to issue 100% licenses.

This position by the DoJ on 100% licensing is 100% wrong. The DoJ’s position will obstruct every level of the music business as songwriters’ creative processes will be impacted by which PRO their co-writers are signed with.  In a world where songwriters, artists, music publishers and record companies are already being paid below market rates by tech companies that built their businesses by using our songs, the DoJ has opened the door for even lower payments.  The DoJ’s decision reaches far beyond our shores and threatens our relationships with foreign writers, publishers and record companies. The DoJ has now unwittingly entered the creative process in the writing room and the recording studio. They do not belong there.

Independent songwriters, music publishers and recording artists deserve more than what we have received here.  The DoJ and its largest supporter in its recent ruling, Public Knowledge, has propped up the media conglomerates at the expense of the entire music industry. We deserve fair market rates that are not regulated by the U.S. government and the ability to decide when and where our property is used.  The DoJ cannot be permitted to decide that for us.

AIMP (Association of Independent Music Publishers), A2IM (American Association of Independent Music) and CMPA (Canadian Music Publishers Association) stand shoulder to shoulder in opposing this unfortunate DoJ decision on 100% licensing. The vast majority of music publishers, songwriters, labels, and recording artists are small- and medium-sized enterprises, and it is essential for them to be able to control the use of their copyrights in order to sustain their businesses and careers.

If we value music, we need to value those who create it.”

6 Responses

  1. Nick

    Does this mean interactive streaming services will be able to get mechanical rights from the PRO’s?

    • Anonymous

      Nope, at least not from ASCAP or BMI. Mechanical rights will continue to be licensed under either direct licenses with the publishers or their agents (such as HFA), or through use of the Section 115 statutory license (i.e. NOIs).

  2. Anonymous

    I was wondering when DMN would start reporting this story.

    I don’t think “100% licensing” means what everyone thinks it means. I think it means simply this… if a music service has licenses and/or consent decrees in place with ASCAP, BMI, SESAC and GMR, and that music services wishes to use a song in which the shares of all four PROs don’t add up to 100%, they can. That’s it. That’s how music services have been interpreting these PRO licenses for decades. Nothing actually changes.

    There are a ton of songs out there where the four PROs don’t know who controls all the rights, or for which the shares of each copyright owner don’t add up to 100% for whatever reason. Maybe it’s due to a share dispute. Maybe the publishers are simply bad at math. Maybe one of the writers decided to go off-grid, grow a beard and is living in the wilderness somewhere with no way to reach him. The problem is, PROs don’t have any good way of knowing when such a song meets that criteria. They only know what their own share is, and not what the other three PROs control. They don’t know when the shares don’t add up to 100%, and have no way of informing the service. The service uses the song, that guy in the wilderness comes back to society, claims the performance rights weren’t licensed, and sues for copyright infringement.

    Music services want to know that if they have deals/consent decrees in place with all four PROs, they can use every single song in the PROs’ repertoires, whether they control it in whole or in part. I think that’s reasonable.

    So how to payments work? Same way they always worked. Once the PRO deal is finalized, the service pays a fee to that PRO and sends them a usage report. The PRO analyzes the usage report, determines what songs they control, and divvies up the fee amount it’s members. The other PROs do the same. Whatever piece of the song happens to be missing simply goes unpaid.

    Now, it’s certainly possible that services could operate under consent decrees with ASCAP and BMI, and not enter deals with SESAC and GMR. 100% licensing would allow them to use some songs they wouldn’t have been able to use otherwise. However, they would have to go through the trouble and expense of identifying all the songs that are 100% SESAC or GMR, which isn’t easy. And if a song is misidentified, it opens them up to infringement. It’s really easier and safer to simply get deals with all four PROs and be done with it.

    The DOJ did screw up though. The consent decrees needs revision. When a service is operating under a consent decree, the songwriters don’t get paid performance royalties for a long, long time. That never sat right with me. It saddens me that meaningful changes were not made. I think that’s what the conversation should be about, rather than this 100% licensing issue, which I feel is really a distraction.

  3. Lest it be overlooked...

    Having commented extensively on this topic [1] as to “what it all means” as there were and still are numerous media reports indicating that there were many industry players confused as to the meaning of the DOJ’s “100% Licensing” scheme, it will be important to observe that any proper interpretation as to what the DOJ’s “100% Licensing” scheme actually means will necessarily require a careful reading of United States v. Am. Soc’y of Composers, Authors & Publishers, Civ. No. 41-CV-1395 (S.D.N.Y. June 11, 2001).

    Furthermore, a close reading will also shed light on the statement of BMI president Mike O’Neil who reportedly stated: “This decision will create a clusterf–k of epic proportions for the U.S. music publishing industry.” Particularly, that it is not the decision of the DOJ that “will create a clusterf–k of epic proportions,” but rather, the “clusterf–k” was actually created in consequence of the fact that “ASCAP entered into approximately 150 agreements that, by their terms, granted to ASCAP exclusive rights to license the rights of public performance in the musical works of certain songwriters, composers, or music publishers….”

    On another note, the Associated Press contributed an article to Billboard today captioned: “Lawyer’s May Have Potentially Relevant’ Info on Prince Heirs” which reported that “one expert said it’s probably not a will.” I am curious as to (1) whether or not either Prince or otherwise his publisher are members of ASCAP, and (2) whether or not either Prince or his publisher were one of the parties that entered into one of the “approximately 150 agreements that, by their terms, granted to ASCAP the rights of public performance in the musical works of certain songwriters, musical composers, or music publishers;” and (3) whether or not this is the “potentially relevant info” that the lawyers are eluding to in the article referenced above – time will tell.

    [1] See the July 11, 2016 DMN article captioned: How the ‘Stairway To Heaven’ Case Could End Stupid Copyright Lawsuits.