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ASCAP and BMI release open letter as the future for consent decrees becomes uncertain

Consent decrees are back in the headlines. These rules govern how performing rights organizations ASCAP and BMI collect fees for use of their catalogs, and have been in effect since the two groups struck the deals with the Department of Justice in 1941. Now, the Department of Justice is reviewing the decrees and considering their end. Today, ASCAP and BMI issued an open letter with their stance on the possible reforms.

“The DOJ’s attention to this matter represents a clear opportunity to do what BMI and ASCAP have been trying to do for years – modernize music licensing to better reflect the transformative changes in the industry,” ASCAP CEO Elizabeth Matthews and BMI President and CEO Mike O’Neill said in a copy of the letter sent to RAIN News. “It’s why when we first heard about the possibility of the DOJ sunsetting the consent decrees, it came as welcome news.”

The pair gave recommendations for new consent decrees that they said would reflect the current music market and protect all parties. In their words, the four key provisions are:

  • First, allow all music users to still gain automatic access to the BMI and ASCAP repertoires with the immediate right to public performance. However, this right should be contingent upon a fairer, more efficient, less costly and automatic mechanism for the payment of interim fees.
  • Second, retain the rate court process for resolution of rate disputes, as recently reformed by the Orrin G. Hatch-Bob Goodlatte Music Modernization Act (MMA).
  • Third, BMI and ASCAP will continue to receive non-exclusive U.S. rights from our writers and publishers, which allows licensees, songwriters, composers and publishers to still do direct deals if they so choose.
  • Fourth, preserve the current forms of licenses that the industry has grown accustomed to beyond the traditional blanket license, such as the adjustable fee blanket license and the per- program license.

The two execs took the opportunity to warn against the possible negative impacts of previously discussed legal changes, such as 100% licensing or compulsory licensing.

“Ultimately, a vibrant PRO system is important to maintain the balance of the industry,” they said. “With more music being used than ever before, it is critical to safeguard the value of the performing right and grow the income stream it generates for creators.”

The two PROs aren’t the only parties trying to sway the Justice Department’s next move. Earlier this month, Senate Judiciary Committee chair Sen. Lindsey Graham, R-S.C., asked the DOJ to wait to make its final decision until he had conferred with antitrust chief Makan Delrahim on the potential impact of the changes. He wrote a letter to Delrahim, the Antitrust Division Assistant Attorney General, arguing that the recently passed Music Modernization Act “included a number of reforms to improve the music landscape as a whole, spanning many different types of rights. Without an alternative licensing framework first in place, any significant changes to the ASCAP & BMI consent decrees could threaten to undo the very reforms enacted into law just months ago.” He argued that the consent decrees, while imperfect, were a satisfactory solution for the time being.

Anna Washenko

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