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Business News Labels & Publishers Legal
BMI supports publishers withdrawing digital rights from the collective system
By Andy Malt | Published on Thursday 7 August 2014
In its submission to the US Department Of Justice’s review of collective licensing in America, collecting society BMI has said that it believes that music publishers should be allowed to choose which rights they allow it to administer.
As previously reported, the review of the collective licensing system in the US was triggered after a court ruled that publishers could not withdraw just their digital rights from BMI and its rival ASCAP. Both Universal and Sony/ATV argue that they should be allowed to deal with digital services directly, in order to gain more favourable rates, while continuing to licence broadcasters and live events through BMI/ASCAP (a split that collective licensing systems elsewhere in the world have allowed).
But the US court ruled that, under the ‘consent decrees’ that govern BMI and ASCAP, publishers cannot pick and choose which services they licence collectively. Basically, it’s all or nothing when it comes to the licensing of so called ‘performing rights’ in musical works. So if publishers were to withdraw from ASCAP and BMI to do direct digital deals, they’d also find themselves having to deal with every radio station, bar, venue and other public space where music is played direct. Which, despite Sony/ATV’s threats in that regard, no one actually wants.
The DoJ asked ASCAP, BMI, Universal Music Publishing and Sony/ATV to submit statements to its investigation last month, and yesterday BMI came forward with its view on the matter. The organisation argued that publishers should be able to retain their digital rights, separate from others, saying that this would improve the service BMI is able to offer on ‘traditional’ rights, while allowing publishers to negotiate better digital deals themselves. Of course BMI and ASCAP would rather lose the right to licence digital platforms than have the big publishers withdraw from the societies completely.
With the consent decrees now up for debate, BMI’s submission also goes beyond digital matters. It says that the consent decree should allow BMI to represent all rights in a musical work, not just the performing right, in order to create a “one-stop” licensing option. That basically means the ‘mechanical rights’, ie the right to make copies of songs.
Traditionally, while both performing and mechanical rights have been licensed collectively in the music publishing domain, separate societies were often created for each. For various reasons, some reckon both elements of the copyright should be licensed together, and in some countries the separate societies have merged (or formed close partnerships) to achieve that. But in the US those pesky consent decrees have prevented BMI and ASCAP from doing that.
BMI also reckons that rate-setting responsibilities in collective licensing should be moved away from the federal court to a new arbitration system, which it says would make for quicker and cheaper dispute resolutions for all parties.
Commenting on all this, BMI CEO Michael O’Neill said: “The time has come to modernise the BMI consent decree. We appreciate the US Department of Justice’s solicitation of public comments as part of the modernisation process. Our goal is to better serve our affiliates and music users, and the DoJ’s request facilitates an industry-wide open dialogue needed for critical reforms”.
The organisation’s Senior Vice President Stuart Rosen added: “Our proposed modifications to the decree will benefit not only our affiliates but the rights marketplace in general. While we feel that there are additional important modifications necessary to modernise the decree, the proposals in today’s filing are the most urgent and, we believe, need to be addressed on a faster timetable”.
When the DoJ began it investigation last month, an ASCAP internal memo noted that the government was likely to look further than just the digital rights system in its review, which could give collecting societies greater freedoms, as BMI seemingly wants. However, it also noted that this could all have negative knock on effects for the US publishing industry.
