A letter signed by thousands of music creators and publishers has expressed concern that the latest US Copyright Office inquiry into the country’s performing rights organisations, like BMI and ASCAP, was prompted by correspondence from three Congress members that “focused solely on the perspective of music licensees and failed to consider our perspective as songwriters, composers and music publishers”.
As a result, the letter states, the questions posed by the inquiry “focus on music users and not music creators”. Which is concerning, because the intention of the Congressional correspondence, it claims, was “to question the efficacy of the music licensing marketplace”, with a view to further ramping up regulation of collective licensing in the US, with the ultimate aim of enabling licensees “to pay less to music creators”.
The music creator letter has been organised by BMI, which has also made its own submission to the Copyright Office’s inquiry, as has its main rival ASCAP.
Both insist that the licensing of performing rights in songs within the US is already over-regulated and that concerns recently expressed by certain users of music are unfounded. Those concerns, the music industry believes, are being used by certain businesses to try to reduce what they have to pay when they make use of music.
This isn’t new, the BMI organised letter notes. “Licensees and their lobbying organisations”, it says, have long made “false and misleading arguments” in a bid to reduce their royalty payments.
The only difference this time, it goes on, is that the licensees are using the emergence of new collecting societies to justify “their renewed push for regulation”, even though those new rights bodies “have gained very little traction in acquiring any share of repertoire actually used by licensees”.
The collective licensing of performing rights in songs works slightly differently in the US, where there are five performing rights organisations, or PROs, each issuing licences for a different repertoire: BMI and ASCAP are the big two, and they compete with SESAC, GMR and AllTrack.
In most other countries there is a single PRO, such as PRS in the UK and SACEM in France. And then there are countries like Brazil where there are multiple societies each representing different songwriters, but a single central entity still issues a full blanket licence.
However, if a user of music in the US wants to make use of all and any songs, it needs to get licences from all the PROs. For decades that meant three licences, from BMI, ASCAP and SESAC. Then GMR launched in 2013 representing a small group of prestigious songwriters. AllTrack arrived in 2019, mainly pitching its services to independent artists and writers.
Some music users - especially venues, clubs, bars, restaurants and hotels - have complained about having to deal with, and pay money to, the increasing number of PROs. And it’s those complaints that seemingly led to the letter from the Congress members that in turn led to the Copyright Office inquiry.
But, argue BMI and ASCAP, while businesses may need to pay for more licences if they want to make use of music represented by all five PROs, that’s simply a cost of doing business. And, ASCAP states in its submission, “in reality, PRO fees represent a small fraction of overall costs and revenues for businesses that profit from the use of music”.
Plus, ASCAP goes on, no business is obliged to have licences from all five societies, or indeed any of them. “All venue owners have the right to choose whether or not they play any music and can similarly choose the music they play”, it writes. “If a music user wishes to limit or reduce its PRO licensing fees, the music user can do so by programming around the need to take a given PRO’s licence”.
Users of music would almost certainly counter that it’s not quite that simple, given the complexities around copyright ownership in music. It’s not always clear which society controls which song and, because of co-ownership, multiple licences may be required to cover a single work.
However, BMI and ASCAP argue in their submission that they are actually very transparent about what songs are included in their respective repertoires, including highlighting what works are 100% covered by either a BMI or ASCAP licence, or by having both a BMI and ASCAP licence. It’s definitely true that the big two US societies have gone further than most in publicly declaring what songs they represent.
Although critics of the societies would no doubt argue that - while it’s possible for a more sophisticated user of music, like a broadcaster, to navigate what music is and is not covered by the licences they hold - for venues and clubs, navigating the databases in that way isn’t always practical.
The other concern raised as part of the current Copyright Office inquiry relates to how the societies distribute the money they collect to individual songwriters and publishers, and whether the systems in place to do that favour superstars and major publishers over everyone else.
That is a concern regularly raised within the music community and not just in the US. Not all users of music can provide societies with accurate usage data - and those that can might hand over trillions of lines of data that then need to be processed. It’s not always entirely clear how societies go about processing that data and what they do with the money that cannot be accurately allocated based on usage.
However, both BMI and ASCAP use their respective submissions to big up their work processing the data and paying through the money they collect to their members, acknowledging that there are challenges, but insisting that their use of technology is improving things, and their distribution policies are fair.
Meanwhile, they question why certain music users are expressing concerns about how royalties are distributed. The implication being that those users don’t really care about independent writers and publishers getting paid, and instead are simply trying to damage the credibility of the collective licensing system in order to cut their own costs.
“The obligation of music users to pay for the right of public performance exists regardless of and without relation to the distribution practices of PROs”, the BMI organised letter declares, before adding, “if licensees truly are concerned about royalty distribution, we and our PRO would welcome additional reporting from them to better capture their usage of our music in their businesses”.
Although collective licensing is regulated to an extent in most countries, the US PROs are subject to more regulation than most, especially BMI and ASCAP, which are both regulated by consent decrees negotiated with the Department Of Justice. Which is why both are adamant that no more regulation is required.
“ASCAP and BMI are already the most regulated entities in the US entertainment industry”, ASCAP's submission states. “Long subject to consent decrees as well as numerous state-enacted PRO licensing laws, ASCAP and BMI, and to a lesser extent the other PROs, must navigate a tightly woven regulatory maze to enforce our members’ rights”.
To that end new “legislative action or regulatory action” to address the concerns raised in the latest inquiry is “unnecessary” and “would ultimately disserve music creators”.