The two big performing rights collecting societies in the US - BMI and ASCAP - have both reached agreements about the royalty rates that should be paid to songwriters and music publishers by US radio stations.
The two deals bring to an end a long running royalty rate dispute which prompted litigation from the radio sector that was both novel and controversial.
The Radio Music License Committee, which represents the broadcasters, wanted the courts to consider its disputes with BMI and ASCAP at the same time, which would likely have made disagreements between the rival societies over their respective market shares central to the proceedings.
Both societies seem happy with what has now been agreed outside of court, with the new deals resulting in increased basic rates. BMI boss Mike O’Neill says, “BMI sought a rate that reflected our market-leading share of the music performed on radio stations across the country and I’m pleased to say we achieved our largest rate increase ever for the radio industry”.
The new deal, he goes on, “ensures BMI’s songwriters will be more fairly compensated for the performance of their music on this incredibly important platform”.
Meanwhile ASCAP chief Elizabeth Matthews says that her society’s deal “locks in an important royalty stream for our members at higher rates”. Not only that, but it will “deliver enhanced benefits, payments and financial certainty to ASCAP songwriters, composers and publishers, which is important to ensuring their creative and economic health and security now and in the future”.
The collective licensing of song rights in the US is highly regulated, with both BMI and ASCAP being subject to consent decrees agreed with the US Department Of Justice. Among other things, that empowers the courts to set the royalty rates paid to the two societies when they can't agree terms with any one group of licences, such as the radio companies.
The way the rate courts work was amended by the 2018 US Music Modernization Act. Although BMI and ASCAP initially welcomed those changes, they weren't happy at all when the RMLC used that new system to propose that its separate disputes with the two societies be heard in the same court proceedings. Previously disputes involving BMI and ASCAP would be considered separately by different judges.
Because in the US you have multiple societies representing the performing rights in songs - with different organisations representing different writers - each society’s market share is often key to deciding what rate any one licensee should pay to each entity.
If BMI and ASCAP were both in court with the RMLC at the same time, they might end up having to argue over their respective market shares in public. But, with these settlements, that now won’t happen.
The BMI deal was announced first, with RMLC Chairman Ed Atsinger commenting, “We are pleased to have reached an amicable agreement with BMI, which is indicative of how strongly the radio industry values its partnerships with songwriters”.
“Furthermore”, he added, “we feel that this agreement provides the radio industry with the ability to plan for the long-term while avoiding substantial litigation costs and uncertainties associated with the rate court process”.