Drama Ensues Over DOJ Music Licensing Decision
Reaction continues to pour in as the Department of Justice reaffirmed its initial decision to leave as-is the consent decrees under which ASCAP and BMI operate. We reported in June the DOJ was expected to require the performing rights organizations to continue to offer full-work licenses, and it has.
The DOJ said it reached “this determination based not only on the language of the consent decrees and its assessment of historical practices, but also because only full-work licensing can yield the substantial procompetitive benefits associated with blanket licenses that distinguish ASCAP’s and BMI’s activities from other agreements among competitors that present serious issues under the antitrust laws.
ASCAP and BMI had sought to offer fractional licenses for musical works written by several people, but the DOJ nixed that too, saying “Although stakeholders on all sides have raised some concerns with the status quo, the Division’s investigation confirmed that the current system has well served music creators and music users for decades and should remain intact. The Division’s confirmation that the consent decrees require full-work licensing is fully consistent with preserving the significant licensing and payment benefits that the PROs have provided music creators and music users for decades.”
NAB President and CEO Gordon Smith says broadcasters support the decision, calling the DOJ’s work a “diligent, comprehensive review … that will ensure that ASCAP and BMI continue to fairly and efficiently license musical works in a manner that is pro-competitive. “
Under the current system, radio broadcasters pay $350 million and local television broadcasters some $150 million to songwriters and their music publishers every year.
ASCAP and BMI vowed to fight the DOJ decision, saying it will cause “cause unnecessary chaos in the marketplace and place unfair financial burdens and creative constraints on songwriters and composers.”
BMI is taking legal action in court and ASCAP is pursuing change legislatively. BMI President Mike O’Neill said the organization believes the consent decrees do allow fractional licensing, which encourages competition. “It won’t be easy, and we know it will take time, but we believe that it is the right thing to do and in the best interest of the industry at large.”