Our friends at Royalty Exchange round up and analyze the top news stories of the last week in music royalties.
With Appeal Arguments Looming, Justice Dept. Quietly Backs Away From a Hard Line on Music Licensing (THR)
Benom’s Take: Overall, this is good news for the public performance royalty market. Today, the Justice Department and BMI are making oral arguments in a battle over performance royalty regulations. This appeal only concerns BMI’s catalog, but its outcome will affect the entire industry.
According to newly released DoJ written comments leading up to today’s oral arguments, it appears the new Trump Justice Department will adopt a “less regulation” stance – at least on the issue of “fractional works.”
The DoJ has softened their language (really altogether backtracked in my analysis) and is now saying the Consent Decree in fact does not prohibit “fractional licensing.” As opposed to their previous hard line interpretation of “100% licensing,” which effectively said the exact opposite. That inability to move from its hard line position was the entire reason for the DoJ’s appeal in the first place.
Their apparent change in tune, of course, has BMI and the music publishing sector breathing a sigh of relief.
We last discussed this ongoing story back in May, when the DoJ made an 11th hour appeal in order to double down on their tough “100% licensing” interpretation. Here’s a little background and reminder about this complex issue from that Billboard article in May:
“Full-works licensing, also known as 100 percent licensing, applies to songs with multiple writers where ownership is divided, also called a split work, or fractionalized licensing. The DOJ says that a music licensee, or music user such as a radio station, only needs to get a license from one of the rights owners to have a license to legally play the music, a stance that music users have long maintained is correct. Music publishers, on the other hand, contend that they have always engaged in fractional licensing and that the music user must get a license from all owners of a song in order to play it.”
The music publishing sector has argued that the 100% licensing model cannot be implemented into the day-to-day operations of BMI and ASCAP. BMI doesn’t even have the rights to grant a partial license for ASCAP works and vice versa. Nor do either have the correct payment or song split data to remit payments on behalf of the other.
It’s sort of like if Coke were selling Pepsi too. We’re talking about two major competitors being forced to work on behalf of the other, without the consent of the either. To quote a music publishing professional from the article, this scenario would create a “cluster* of epic proportions.” [READ MORE]
And now for this week’s other headlines:
- Irving Azoff’s Global Music Rights, Gains Edge in Antitrust Battle With Radio Stations (Billboard)
- Could Universal Music Group Really Be Worth More Than $40 Billion? (Music Business Worldwide)
- SoundExchange Music Streaming Royalty Rates Going Up Slightly in 2018 (Billboard)
- Warner’s Recorded Music Revenues Soar Above $3 Billion for First Time in Over 10 Years (Music Business Worldwide)
This round-up was put together by Benom Plumb, Assistant Professor of Music Industry Studies at the University of Colorado Denver.
