Behind the Justice Department ruling about music-licensing royalty agreements

Posted on: August 10, 2016

“The Justice Department announced on Thursday that it had concluded a two-year investigation into the complex world of music licensing and decided against making changes to the regulatory agreements that govern ASCAP and BMI, two large clearinghouses for performing rights that process about $2 billion in royalty payments each year” for composers and music publishers, writes Ben Sisario in Friday’s (8/5) New York Times. “BMI quickly said it would challenge the decision in federal court, and ASCAP said it would ‘explore legislative solutions’ to the problems of music licensing in the digital age.… Since 1941 [ASCAP and BMI] have been bound by regulatory agreements called consent decrees. Two years ago, both organizations asked the Justice Department to change these agreements … to secure fair royalty rates in the digital era…. The Justice Department [instead] added a requirement, saying that for ASCAP and BMI to comply with the existing regulations, they must offer ‘100 percent licensing’ of their songs. Many songs have multiple writers, and those writers don’t always belong to the same rights society…. The Justice Department is giving the music industry a year to comply… It is unclear how this would happen, but industry executives say it could include the creation of new databases to share data that previously was proprietary.”

Posted August 10, 2016