Council of Music Creators STATEMENT ON THE REPORT
FROM THE COPYRIGHT OFFICE ON MUSIC LICENSING
We believe this thoughtful and thorough report on the business of music licensing is very positive for music creators and for the PROs. For songwriters, the most important aspect is that the report calls for (rough) parity between the sound recording and the underlying composition. That's huge. But there are other very good things for all writers.
The report recommends that all rate setting procedures take place in front of the Copyright Royalty Board, and NOT rate court with Judge Cote. (In fact, the report criticizes Judge Cote for her decision on Pandora, finding that the low rate she set was somewhat arbitrary and ignored benchmark rates.) Overall this is very good for the PROs, although the CRB is not without its challenges.
The report sets out a framework where any organization with a greater than 5% market share (e.g., ASCAP or BMI or SONY or perhaps even MRI) can establish itself as an Music Rights Organization (MRO), under fairly strict guidelines established and monitored by the government. An oversight agency with representation by songwriters and publishers would monitor the activities of the MROs. Writers could exercise the option to have their royalties distributed through the MRO of their choice.
Almost more than any other aspect of its entire inquiry, the Copyright Office repeatedly focused its attention the problem of upstream transparency for music creators in a world of direct licensing. That was a central theme for almost all music creator organizations in comments to the Copyright Office, and they clearly got the message.
One issue the Copyright Report did not address was the situation for film and TV composers who work under Work-For-Hire laws. However, it's worth noting that WFH laws affect tens of thousands of workers in many different industries, so it's not surprising that the Copyright Office put that issue aside in its deliberations over music licensing.
Film and TV composers absolutely need a solution which guarantees their right to future performance royalties for their work, but since the Copyright Office is recommending that all royalties be paid through MROs subject to government oversight, it seems they have decided to fix the problem that way for the moment.
As valuable as the report is, it does not end the DOJ inquiry into the Consent Decrees of ASCAP and BMI, and it does not mean that legislation will be easy. Ultimately, we will have to fight for our rights in Washington.