ASCAP sent us an open letter written jointly with BMI to Makan Delrahim, the Assistant Attorney General for the Antitrust Division of the United States Department of Justice. The subject is a recently concluded two-year DoJ review of consent decrees, the government regulated law which compels ASCAP and BMI to license creative musical works at a set royalty structure.
This law is 80 years old. ASCAP and BMI are the largest representing agencies for composers and songwriters. They periodically attempt to dismantle the compelling law; doing so would put their vast musical catalogs to piecemeal negotiation, severely hampering the businesses of music distributors from broadcast radio to streaming services. ASCAP and BMI don’t like being compelled. Congress doesn’t like choking a pipeline of content availability to distributors.
The latest result is that the 80-year span will stretch on without change for now. In the open letter (copied below), ASCAP CEO Elizabeth Matthews and BMI President and CEO Mike O’Neill submit a tone of calm reactivity, expressing disappointment that their main goal remains unfulfilled, but asserting a certain satisfaction that the DoJ “left open the possibility of changes in the future.”
The placid tenor of the middle-road response is due to a DoJ segment which surprisingly advocated for more compulsion: “Unfortunately, we also found that some were using this review to advocate for even greater restrictions in our decrees, either for their own benefit or in an effort to regulate the marketplace as a whole through BMI and ASCAP.”
That was understandably scary, and our reading is that ASCAP and BMI came away with an acknowledgment that things could have gone much worse. “Although it would have been wonderful to see our decrees modernized, we would rather they remain as they are, than see an outcome that could adversely affect music creators for generations to come.”
Following is the complete open letter:
January 15, 2021
An Open Letter from ASCAP CEO Elizabeth Matthews and BMI President and CEO Mike O’Neill in Response to the DOJ Closing Statement on the ASCAP and BMI Consent Decrees
Two years ago, the U.S. Department of Justice (DOJ) announced that it would conduct a review of the ASCAP and BMI consent decrees to determine if they still served their intended purpose. Today, the DOJ has formally closed its review and will take no action to modify or terminate the decrees but left open the possibility of changes in the future.
While we were disappointed that no action was taken, we are encouraged to see how the DOJ’s approach to these issues has evolved. In his closing remarks, AAG Makan Delrahim recognized several important truths that we have long understood: Songwriters are the backbone of the music marketplace and must be paid fairly; blanket licensing is incredibly efficient; ASCAP and BMI are innovating to serve the needs of the industry; greater competition and not compulsory licensing is the answer; and the value of music is best decided in a free market.
While BMI and ASCAP have long advocated for updating and modernizing our consent decrees, it has become clear over the course of two different reviews by two different DOJ administrations in the past eight years that modifying or terminating our decrees would be extremely challenging.
This latest review was part of a broader effort by the DOJ to examine many of the nation’s oldest consent decrees and to terminate those that no longer served their intended purposes. When faced with that possibility, ASCAP and BMI joined together and put forth a proposal to the DOJ and the industry that would help facilitate a thoughtful transition to a free market while avoiding potential chaos in the marketplace.
We knew that reaching consensus would not be easy. It soon became clear that key industry participants could not agree on how best to move forward. Unfortunately, we also found that some were using this review to advocate for even greater restrictions in our decrees, either for their own benefit or in an effort to regulate the marketplace as a whole through BMI and ASCAP.
We were concerned that the lack of consensus in the market could lead to a legislative push resulting in unwarranted government regulation of our industry in the form of compulsory licensing. In addition, our victory in confirming the industry-wide practice of fractional licensing would have been revisited. These factors would absolutely not be in the best interest of our songwriters, composers and publishers, and indeed, would represent a major step backward. Although it would have been wonderful to see our decrees modernized, we would rather they remain as they are, than see an outcome that could adversely affect music creators for generations to come.
The formal close of this review means we can put this matter behind us for the near future and continue to champion the rights of our songwriters, composers and publishers, protect the value of their creative work, and partner with our licensees to help ensure music is delivered to the public.
It’s important to remember that BMI and ASCAP have operated with consent decrees for over 80 years, and that has not prevented us from innovating along with our changing marketplace. We recently joined together to launch the Songview data platform in order to respond to a growing industry need to provide greater transparency around copyright ownership shares. We appreciate the DOJ’s support of this initiative. In addition, we have each independently experimented with new forms of licenses, and we successfully advocated for provisions in the Music Modernization Act that will drive fairer negotiations and allow the introduction of more marketplace-pricing evidence in rate court proceedings. Whether we operate under consent decrees or not, that spirit of innovation and focus on continual improvement will never change.
Again, although we were disappointed no changes were made, we would like to thank Makan Delrahim, Assistant Attorney General, Antitrust Division, for his attention and efforts throughout this review as he evaluated the best way to move our industry towards a free market. We would also like to thank the many ASCAP and BMI songwriters and composers who shared their views with the DOJ.
While we are both looking forward to the day when ASCAP and BMI are no longer under consent decrees, we were buoyed by the DOJ’s comments that it will pay to revisit these decrees as a result of new market developments. When the appropriate time comes, BMI or ASCAP may wish to seek a future review.
For now, we’ll turn our attention to the opportunities that lie ahead in 2021 and, of course, all of the incredible new music the year will bring.
— ASCAP CEO Elizabeth Matthews and BMI President and CEO Mike O’Neill