Music licensing is a mess — few people or companies would disagree. The copyright arm of the U.S. government, which is charged with immense responsibility in overseeing royalty rates, is thinking about change. As part of the process, the U.S. Copyright Office is initiating a Music Licensing Study, and seeks comments.
With perhaps a touch of defensiveness, the Copyright Office frames the project with this prelude:
“While the Copyright Act reflects many sound and enduring principles, and has enabled the internet to flourish, Congress could not have foreseen all of today’s technologies and the myriad ways consumers and others engage with creative works in the digital environment.”
Licensing royalties to performers and record labels are arbitrated by the Copyright Royalty Board (CRB) in five-year periods, and it takes two years to hammer out terms among all stakeholders. that structure, by itself practically guarantees that regulations will lag behind digital business realities. The regulatory process is codified in Sections 112, 114, and 115 of the U.S. Copyright Act, and it is those sections under discussion in the comment process. (Click the links to see the texts of those sections.)
The call for comments offers 23 Subjects of Inquiry to guide submissions. they require some familiarity with the sections linked above. Some of the points are broad enough to accommodate any sort of comment, suggestion, complaint with the current regulatory maze — “Please assess the effectiveness of the current process for licensing the public performances of musical works.”
In other cases, the inquiry seems pointed directly at the most controversial aspects of a wildly uneven licensing landscape — “What is the impact of the varying ratesetting standards applicable to the Section 112, 114, and 115 statutory licenses, including across different music delivery platforms. Do these differences make sense?” One stark example is broadcast radio’s exemption from paying royalties to labels and performers, while Internet radio service Pandora pays about half its revenue to labels.
If the Copyright Act is headed for reform, this is the webcaster’s opportunity to be part of the process.