An Argument for Less Music Regulation

In an op-ed piece written by Rep. Doug Collins (R-Ga.) for The Hill, the Congressman argues for deregulating the music industry in order to promote music creation.  Collins states that “The main struggle today is largely due to the fact that the laws and regulations that govern music licensing cannot keep up with the innovations in music access… the industry is in a tailspin about how to compensate songwriters and artists amidst the web of outdated polices that govern a marketplace that didn’t exist a decade ago.”

Collins goes on to state that there are parties that benefit from the lack of clarity in the laws that govern ASCAP, BMI, and their Royalty Rates.  And that these large corporate interests, mainly tech companies, often argue that they have a moral obligation to provide public access to artists’ work. When in reality, these organizations are profitable primarily due to the sub-market rates they enjoy from governmental regulations.

On the other side, it is speculated that music creators and those whom represent them will benefit the most from reform, therefore those groups are looking forward to further changes.

Royalty Rates Continue to be Debated

The way artists & labels as well as writers & publishers are compensated is under a microscope with the US Justice Department reviewing consent decrees and the music industry pushing for terrestrial radio to start paying for the use of music. Now some are examining the difference in compensation between labels & artists and writers & publishers. Billboard gets National Music Publishers’ Association (NMPA) president and CEO David Israelite and Atlas Music Publishing CEO Richard Stumpf to weigh in (here).

Both want to see a balance between performer and publisher payout, where the rates would be set by market forces rather than under compulsory licenses. “”The record labels, on behalf of the performers, went in and negotiated very large percentages, which is great but lopsided, in that they’re getting 50% of the money a Pandora will earn, where songwriters are only getting four [percent],” Stumpf says” in the article. 

Justice Department Requests Documents from PROs & Major Publishers

The US Department of Justice sent CIDs (Civil Investigative Demand for Documents) to a group of PROs (Performance Rights Organizations) and major music publishers. It is speculated by the recipients that this request is in connection with the examination of the consent decrees but the investigation will also include the possibility of collusion between major publishers and the PROs during the rate trial with Pandora. The judge from that trial determined “In her rate-setting decision, Judge Denise Cote, the ASCAP rate court judge, wrote on page 95 of her decision that Pandora has shown the Sony and UMPG licenses (which were direct deals, cut after the publishers withdrew digital rights) to be the product of, at the very least, coordination between and among these major music publishers and ASCAP.”

Many moving pieces here, this article in Billboard helps to lay out the detail.