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ASCAP and BMI hit out at US radio industry plan to force combined rate court hearing

By | Published on Thursday 16 June 2022

ASCAP and BMI logos

American song right collecting societies ASCAP and BMI have hit out at the US Radio Music License Committee after it filed a motion with a court in New York seeking a single hearing to consider what royalty rates radio stations should pay the two rights organisations.

Collective licensing, ie where large groups of copyright owners come together to license their rights, is highly regulated in the US. ASCAP and BMI – the two big societies representing the performing rights of songwriters and music publishers – are regulated by the so called consent decrees.

Under those regulations, if a licensee – or group of licensees – can’t agree with either ASCAP or BMI what they should pay in order to make use of each society’s repertoire, they can take the matter to a rate court hearing, where basically a judge hears arguments from both sides and then sets the rate.

Traditionally there were two judges who oversaw such hearings, one when it involved ASCAP and another when it involved BMI. However, the 2018 Music Modernization Act – which made a number of reforms to US copyright law – introduced a new system. Under that new system, each time there is a rate court hearing one of a team of judges is randomly assigned to run the proceedings.

ASCAP and BMI supported that change, with the former explaining at the time that it would “ensure that the judge will find the facts afresh for each rate case based on the record in that particular case, without impressions derived from prior cases”.

However, the RMLC, which represents the US radio industry when it is negotiating music licences, is seeking to use that change to the rules to force a combined hearing in front of one judge to discuss what rates stations should pay to both societies.

Neither ASCAP nor BMI want that approach to be taken, with both insisting that was not the intention of the MMA reforms. It’s feared that a combined hearing would pit ASCAP against BMI, ultimately pushing the overall rates paid into the music industry down.

For example, because there are multiple collecting societies representing the performing rights of songwriters in the US, one element of the negotiations between the societies and licensees is market share. Basically, where a licensee has a revenue share arrangement with the music industry, what percentage of revenue share is allocated to each society is usually influenced by the society’s share of the market.

However, quite how market share should be calculated often proves to be controversial. And with a combined rate court hearing, rather than the argument over market share being between a licensee and a society, that argument could end up being between ASCAP and BMI.

Responding to the RMLC’s motion to force a single combined hearing, BMI said in a statement: “We are astonished that the RMLC has decided to bring an unprecedented joint action against BMI and ASCAP, relying on a gross mischaracterisation of the Music Modernization Act”.

“We are also disappointed that the RMLC opted to commence this action rather than engage in negotiations with BMI”, it went on. “We will vigorously oppose the improper joint action and look forward to establishing the significant value of the BMI repertoire to radio before the BMI rate court”.

Meanwhile, ASCAP CEO Elizabeth Matthews added: “The litigation filed today is squarely aimed at reducing what powerful RMLC radio stations pay songwriters, who are the lifeblood of the radio industry. The RMLC is weaponising their market power to punish the songwriters whom it relies upon for its business. ASCAP will vigorously fight for the right of our members to be paid fairly”.