The Justice Department has decided not to modify the consent decrees that allow performance licensing organizations (PROs) like ASCAP and BMI to collectively negotiate rights to music on TV, radio and the internet.
Broadcasters have argued that neither Justice nor Congress should overhaul the consent decrees, so were pleased. Music publishers vowed to challenge the decision in court.
Music publishers were looking to get selectively out of the BMI/ASCAP regime so they can independently negotiate with digital suppliers like Pandora, arguing they are being undervalued in digital play.
ASCAP and BMI aggregate rights from a host of musical works and provide a blanket license for their performance at a single price, regardless of whether an individual work is actually performed. Without the consent decrees, which were struck with the Department of Justice in 1941 following complaints of anticompetitive activity, broadcasters argue, such control over music licenses would be a de facto antitrust violation.
Under the current system, TV stations pay $150 million per year and radio stations $350 million to songwriters and publishers, according to the National Association of Broadcasters.
Both sides were quick to weigh in.
"Local radio and television broadcasters strongly support the Justice Department’s decision not to modify the ASCAP and BMI consent decrees," said NAB president Gordon Smith. "We appreciate the hard work of the DOJ during its diligent, comprehensive review and believe that this decision will ensure that ASCAP and BMI continue to fairly and efficiently license musical works in a manner that is pro-competitive. Broadcasters look forward to continuing our close relationship with these performance rights organizations, which have worked to the mutual benefit of songwriters, music licensees, and listeners around the world for decades."
Computer & Communications Industry Association president Ed Black was equally pleased.
“ASCAP and BMI control 90% of the music marketplace, so keeping the current protections against anticompetitive behavior is important," he said. "After a multi-year investigation and talking to a wide variety of stakeholders, the Department of Justice wisely decided not to modify the ASCAP and BMI consent decrees. This is an important decision that will help promote competition and protect users and consumers of music. The DOJ also clarified that those who purchase blanket licenses from ASCAP and BMI have the unlimited right to these organizations’ songs.”
“The Department of Justice has reached an outcome that appropriately takes into account the public interest and the pro-competitive role played by ASCAP and BMI in the music licensing marketplace," said Public Knowledge policy counsel Raza Panjwani. "We’re heartened by the Department’s decision to leave the protections of the consent decrees in place, ensuring that the PROs will continue to offset the harms posed to the licensing marketplace by industry consolidation, rather than amplify them."
"The Antitrust Division's decision to maintain the consent decrees in their current form ensures an efficient and fair licensing system for all stakeholders," said Consumer Technology Association president Gary Shapiro. "We also applaud DOJ's clarification that music users who purchase ASCAP and BMI blanket license obtain the unlimited right to play the songs in these organizations' repertoires. We will continue to work with all stakeholders to promote a healthy, vibrant music marketplace that benefits innovators and music creators."
Music publishers were as unhappy as the others were pleased.
“The Department of Justice (DoJ) has dealt a massive blow to America's songwriters," said National Music Publishers’ Association president David Israelite. "After a two year review of the consent decrees that govern ASCAP and BMI, career lawyers who were never elected nor confirmed to their positions, led by a lawyer who previously represented Google, determined that songwriters should have even fewer rights, less control over their intellectual property and be treated more unfairly than they already are. The Department ignored the voices of copyright experts, members of Congress and thousands of songwriters and delivered a huge gift to tech companies who already benefit from egregiously low rates."
Israelite was not done: “Washington bureaucrats should not be in the business of regulating music as they are neither capable of understanding or fixing the problems they've created," he said.
ASCAP and BMI pledged to fight a two-front war on the DOJ decision.
"ASCAP and BMI believe that the DOJ got this wrong, and we will not rest in our mission to fix the problems the DOJ decided not to solve," said ASCAP president Paul Williams. "ASCAP and BMI together are pursuing a joint strategy to overturn the DOJ’s decision and modernize the outdated consent decree system. As part of this joint effort to generate change on two major fronts, ASCAP will lead the push for legislation in Congress to address the outdated consent decrees in favor of legislative solutions that make sense for the future of American music and BMI will challenge the DOJ’s decision on 100% licensing in federal rate court. ASCAP and BMI are in full support of one another’s efforts."