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US radio industry takes its BMI royalty dispute to the rate court

By | Published on Monday 21 May 2018


As US Senate last week put the spotlight on the radical overhaul of music licensing that is being proposed Stateside via the Music Modernization Act, new court papers were filed in New York in a long running dispute that relates to the debates ongoing on Capitol Hill.

The Radio Music License Committee, which represents many US broadcasters, has been in long-drawn out negotiations with one of the big American song right collecting societies – BMI – over a new licence, with neither side being able to agree on rates.

An interim deal was done in early 2017 on what royalties RMLC-affiliated stations should pay while negotiations were ongoing, but no agreement has been reached on long-term rates. With that in mind, the radio grouping filed papers with the federal rate court on Thursday evening, requesting that a judge now intervene.

Most attention given to the current incarnation of the Music Modernization Act has focused on its efforts to fix the way streaming services are licensed by publishers and songwriters, and the bid to end the pre-1972 quirk on the sound recordings side.

But the legislation also has something to say about the way the rate courts set royalties on BMI and ASCAP licences. One of the proposed kickbacks to the songwriter community for making the licensing process easier for streaming services, is that the criteria employed by the rates courts when hearing disputes on ASCAP or BMI licences are changed so to more accurately reflect market rates.

In the meantime, it remains to be seen how this rate court battle plays out. BMI argues that the royalty rates proposed by the RMLC are based on “flawed market data”.

The society’s Executive VP Of Licensing & Creative, Mike Steinberg, said on Friday: “BMI has spent more than two years attempting to negotiate a new rate with the Radio Music License Committee that fairly and accurately reflects the scope and quality of the music we represent”.

He went on: “As anticipated, the RMLC is trying to use a below-market rate they negotiated with the only US PRO they were able to come to an agreement with; an agreement based on flawed market share data and one that has since been made irrelevant by newly-agreed to and adjudicated rates in the marketplace. We look forward to presenting our position before the court and demonstrating the dominance of BMI’s repertoire”.