Consent decree reform: getting back in step with the music marketplace

As music licensing is back in the headlines, there has been a new wave of misinformation about Performing Rights Organizations seeking to dodge their consent decrees. Forbes contributor Christopher Versace revived that accusation last week in another op-ed that glosses over the facts and misrepresents both the realities facing the songwriting community and the practices of the marketplace. In response, BMI feels obligated to clarify.

BMI has made three proposals to the Department of Justice to modify our consent decree: digital rights withdrawal which would allow publishers to remove certain digital rights from their PRO and strike their own direct, free-market deals; bundling rights which would increase market efficiency by allowing music users to obtain multiple rights from BMI for broader usage; and moving to a binding arbitration model for establishing rates, which would be quicker and more affordable than the current federal rate court model.

{mosads}What we are seeking, contrary to accusations, would in no way increase our organization’s power. Despite Versace’s claim, BMI is not trying to “throw off the shackles” of our consent decree, but rather asking that it be modified to accommodate changes that have deeply affected our industry – the digital revolution Versace’s op-ed both downplays and praises.  If anything, the specific changes sought by BMI would benefit music users and, indeed, would reduce BMI’s purported power.

Written decades before the rise of streaming music services, BMI’s current consent decree is out of step with the marketplace. While Versace alleges it was put in place over an abuse of market power, the truth of the matter is that BMI was born out of procompetitive necessity, willingly entered into the consent decree in 1941, and has operated without a single violation under its provisions ever since.

Amending such outdated anticompetitive restrictions would allow BMI (and, more critically, our member songwriters, composers and publishers) to be in sync with the model the marketplace is already following. From our organization’s perspective, it is in the best interest of music creators, music users and listeners for the DOJ to let us follow where the marketplace goes.

Versace also mischaracterizes the Songwriter Equity Act, claiming the proposed bill would “threaten to kill the fastest growing platform for writers to monetize their work – streaming music services.” This is an unrealistic view of both the bill itself and how streaming music services have been conducting their business. If passed, the SEA would not automatically raise rates or require any particular rate, but simply allow judges to examine all relevant evidence of marketplace deals before determining fair compensation for songwriters, composers and music publishers. In simplest terms, the aim of the bill is to keep business transactions between music creators and digital platforms fair and equitable.

Modifying and modernizing the BMI consent decree would aid in our effort to ensure that working songwriters are paid fairly for their creative contributions, while better meeting the needs of music users. In short, BMI is only asking for changes that would update and improve the process for all parties concerned. 

Stuart Rosen is the senior vice president and general counsel of BMI, overseeing global operations of the legal department, directing the organization’s legal affairs, as well as all attorneys working within the company.