Business News Labels & Publishers Legal Media Top Stories

US Copyright Office publishes numerous proposals for overhaul of music licensing

By | Published on Friday 6 February 2015

US Copyright Office

The US Copyright Office yesterday published a lengthy report proposing a pretty radical overhaul of music copyright in the States – covering both the copyrights in songs and recordings. And while the end-game is the simplification of music licensing – something that users of music in the brand, broadcast and digital sectors would all welcome – most of the measures proposed will appeal most to music rights owners, and/or the individuals who compose, perform and produce.

The report begins by noting: “There is a widespread perception that our [music] licensing system is broken. Songwriters and recording artists are concerned that they cannot make a living under the existing structure, which raises serious and systemic concerns for the future. Music publishers and performance rights organisations are frustrated that so much of their licensing activity is subject to government control, so they are constrained in the marketplace. Record labels and digital services complain that the licensing process is burdensome and inefficient, making it difficult to innovate”.

It then adds: “While there is general consensus that the system needs attention, there is less agreement as to what should be done”. But, having taken input from all the stakeholders, the Copyright Office itself has plenty of proposals. A big chunk of those would remove or refine some of the idiosyncrasies of music licensing in the US, possibly bringing things more in line with Europe.

If the proposals were to be enacted, some of the compulsory licenses would be removed or overhauled, giving rights owners more freedom to choose which services to licence and on what terms. The American music publishing sector’s collecting societies would be able to deal in both performing and mechanical rights. And, perhaps most significantly, AM and FM radio in the US would be obligated to pay royalties to record companies as well as music publishers for the first time.

When it comes to the sound recording copyright, the Office also proposes that Congress put all recordings under the protection of federal copyright law. This, of course, has been a big issue of late in America, as online and satellite radio services have argued that the royalties they are due to pay labels under US-wide copyright rules shouldn’t apply to pre-1972 repertoire, because that is protected by state rather than federal law.

Some significant court rulings last year have suggested that the royalties are due under state law too, though that’s not yet fully confirmed, and even if it is, it creates a confusing mess when it comes to the webcasting, broadcasting and the public performance of recorded music. Formally extending all federal copyright law to the entire protected catalogue would fix that problem.

But not all the Copyright Office’s proposals address uniquely American issues, with some thoughts given to concerns of rights owners and licensees worldwide (even if it is only empowered to address those concerns within the US).

The report tackles the copyright ownership data problem, whereby it is very hard for licensees to work out who owns what songs and recordings. The report proposes including incentives in the statutory licensing system to encourage rights owners to publish extensive and user-friendly data. It also makes mention of the biggest bugbear for artists and songwriters, the lack of transparency in the direct deals done between labels and publishers and digital music platforms.

All in all, it’s an extensive overview of music licensing in the USA, with some clear and wide-reaching proposals for change. Quite what America’s political class will make of the proposals remains to be seen. The report does seem to favour copyright owners over copyright customers, and lobbyists for the latter – and especially the radio industry – will be out in force if any of these suggestions become legislative proposals in Congress.

Before then, we are still awaiting, of course, for the US Department Of Justice to rule on whether or not the consent decrees that govern the collective licensing of songs in the US should be overhauled, principally giving publishers and songwriters the power to withdraw their digital rights from ASCAP and BMI while keeping their broadcast and public performance rights in. The Copyright Office’s report says they should have this power. But will the DoJ agree?

Meantime, you can read all 245 pages of the report for yourself (most of the important stuff is in the eleven page executive summary) here.