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ASCAP and BMI consent decrees up for review after Pandora pull stalled

By | Published on Wednesday 4 June 2014


The anti-trust division of the US Department Of Justice has opened a review of the ‘consent decrees’ that govern the two main performing right societies for the American music publishing sector, ASCAP and BMI.

So called collective licensing, where large groups of copyright owners choose to licence their catalogues as one to certain groups of users in certain scenarios, is often convenient for both licensor and licensee, and copyright law therefore allows it. Though such licensing does throw up all sorts of competition law concerns, given that the copyright owners could be accused of creating a content monopoly by negotiating as one.

To that end, extra rules usually apply to collective licensing negotiations, such as those done for the UK music publishers by PRS For Music and the UK record labels by PPL, often with a mediator – a tribunal or court – empowered to intervene where a group of licensees can’t agree terms with a specific collecting society.

In the US, ASCAP and BMI are governed in no small part by their ‘consent decrees’, which arguably put more restrictions on the two societies than many of their counterparts around the world. And those restrictions have caused problems for the big music publishers in recent months as they seek to revamp the way they work with digital services. And especially ‘interactive radio services’. And especially especially Pandora.

While the record industry has, in the main, sought to licence most digital services directly rather than via its collecting societies (though, actually, in the US, separate copyright law forced the labels to licence Pandora through a society), the music publishers, whose collecting organisations are generally more prolific, started out licensing most digital platforms through the collective licensing system.

However, some of the bigger publishers have started to reconsider that approach, initially with the so called ‘mechanical rights’ (which cover any copying of songs), and more recently with the ‘performing rights’ (which cover the public performance of songs) too. It’s the latter that ASCAP and BMI handle.

However, when the major publishers told Pandora that they would soon be withdrawing from the collective licensing system for its kind of service, necessitating the digital company to do direct (and more expensive) deals directly with the publishing firms, the copyright courts threw a rather large spanner in the works. They said that, under the ASCAP and BMI consent decrees, publishers had to be all in or all out, they couldn’t use their society to licence broadcast and public performance, but not interactive radio.

All of which has led to the US publishing sector calling for the limiting consent decrees to be rewritten, hence the DoJ’s review. The government department has called on all interested parties, including songwriters, publishers and digital services, to submit their opinions on the decree documents, and how they should work in the digital age.

The review doesn’t mean that the publishers will get their way, at all, and certainly not in the very near future, because such consultations can routinely take up to two years to complete. Though Billboard says some sources reckon that the DoJ is hoping to speed this one through, relatively speaking.

Either way, the US publishing sector has welcomed the review, with a spokesman for the biggest music publisher of them all, Sony/ATV, telling CMU: “In the current digital environment, it is crucial that ASCAP and BMI’s outdated consent decrees are amended to reflect the realities of the current marketplace and emerging business models. We welcome the Department Of Justice’s review and we are optimistic the system will be reformed to allow our writers and composers to receive fair market value for their music”.

The big publishers have threatened to withdraw from collective licensing altogether if the decrees aren’t altered on this, though whether they’d actually go through with any such threat isn’t clear.