Business News Labels & Publishers Legal

SESAC responds to criticism of its last minute Music Modernization Act lobbying

By | Published on Thursday 26 July 2018


US collecting society SESAC has responded to highly vocal criticism by certain American songwriter groups over its parent company’s last minute intervention regarding long-in-development music copyright reform that is still working its way through Congress.

The Music Modernization Act will change various aspects of music copyright law in the States. A key element is the creation of a new mechanical rights collecting society to overcome the mess that is song right licensing in the streaming domain in America.

There is no direct equivalent of the UK’s MCPS collecting society in the US. Instead labels and digital services exploiting the mechanical rights in songs hire agencies to make sure the right paperwork and payments are sent to the publishers and writers who control the songs they exploit. One such agency is the Harry Fox Agency, which is now a sister business to the performing rights organisation SESAC.

Seemingly concerned about the impact the new mechanical rights collecting society will have on HFA’s business, private equity firm Blackstone – which owns both HFA and SESAC – has been seeking to amend the MMA to its advantage as the copyright proposals work their way through US Senate.

Both Nashville Songwriters Association International and the Songwriters Of North America fear Blackstone’s proposals could scupper the entire act. An act, they add, which has been carefully negotiated by organisations representing artists, songwriters, labels, publishers and digital services, as well as the bigger American PROs BMI and ASCAP.

Hitting out at the late-in-the-day lobbying by Blackstone, SONA said earlier this week: “The performance rights organisation SESAC … is actively pushing an amendment in the US Senate that could effectively kill the Music Modernization Act”.

Blackstone and SESAC had already responded to that criticism, insisting that they weren’t seeking to kill the MMA. However, as NSAI and SONA called on songwriters who are allied with SESAC to take their collecting society and its owner to task over their recent manoeuvrings, the PRO put out a new statement yesterday.

It said: “SESAC is America’s second oldest PRO. We have a long history of advocating on behalf of songwriters and providing a premium value for their work unavailable at other PROs in the US since the 1940s. SESAC is a driver of competition that benefits all songwriters”.

“SESAC wholeheartedly supports the goals of the Music Modernization Act and wants those goals made law – just like you do”, it went on. “We are concerned that a lack of competition might damage not only our business, but songwriters too. We’ve suggested a simple amendment to improve competition so we can continue to ensure that all songwriter and publisher royalties continue to grow. Any assertion to the contrary is simply dishonest”.

NSAI and SONA insist that the most recent draft of Blackstone’s amendment will not be backed by other music industry groups, not to mention the streaming services that will fund the new collecting society. It remains to be seen if a last minute compromise can be reached that satisfies Blackstone without alienating the rest of the music community coalition.