In early 2013, the House Judiciary Committee of the U.S. Congress began a comprehensive review of the U.S. copyright laws to determine if the current laws are still relevant and working in the digital age. As part of this effort, the Copyright Office initiated a study of the past and current music licensing marketplace in early 2014. This report, Copyright And The Music Marketplace, included two requests for public comments (over 130 parties responded with hundreds of pages); and three, two-day public roundtables (Nashville, L.A. and New York), in which over 100 people participated. The results of the music copyright study are presented in the Office’s 245 page report which was published on Feb. 5.
One very profound, but not surprising, statement the Copyright Office made in the report is this. “The Office’s review of the issues has confirmed one overarching point: that our music licensing system is in need of repair.” I would add to that; great need of repair.
I’ve read the full report. While it was not a page turner like Dan Brown’s “The Da Vinci Code”, it held my interest. This is real life, current, and very relevant to all of us in the music industry. It will likely impact our livelihood, and the future of music in the U.S.
In this article, I will attempt to summarize some of the big stuff, and at least five things you should know. However, my attempt is my own personal interpretation. You should read it yourself.
The full report consists of three primary segments; Shortcomings, Analysis, and Recommendations. It also identifies what it calls “broad consensus among study participants on four key principles.” Those are:
1. Music creators should be fairly compensated for their contributions.
2. The licensing process should be more efficient.
3. Market participants should have access to authoritative data to identify and license sound recordings and musical works.
4. Usage and payment information should be transparent and accessible to rights owners.
Here’s what I believe are the 5 top things you need to know about the report.
- The Office recommends License Parity. They believe that, at least in the digital space, sound recordings and songs should stand on a more equal footing, including allowing an opt-out for song owners in interactive streaming and downloads. Other areas of change advocated are performance royalties to be paid for sound recordings by terrestrial radio, pre-1972 recordings to have full federal protection under federal law, and a uniform, market-based rate setting standard (willing buyer/willing seller) for all government controlled licenses.
- The government’s role in music licensing should be more relaxed. The Office recognizes that compulsory licenses remove choice and control from the owners. While it does not call for the removal of all such statutory licenses, it suggests they be more relaxed within Section 115 compulsory licenses, including blanket licensing and adding audit rights for copyright owners. The report also suggests loosening the Consent Decrees placed on ASCAP and BMI, including more fair and efficient rate setting procedures, allowing bundled licenses, and permitting publishers to opt-out of PROs for certain rights. They also recommend various changes in Section 112 and 114 licenses.
- The Office believes the industry would greatly benefit from an “accurate, comprehensive, and accessible” authoritative database of works, leading to more efficiency and transparency in licensing.
- The Office recommends an updated framework for licensing which includes multiple, qualifying Mechanical Rights Organizations (MROs) and one General Mechanical Rights Organization (GMRO). They suggest ideas of funding and maintaining these entities, as well as regulations that these entities should work under.
- The fifth point worth highlighting is the obvious need of these changes to happen now…and with our involvement. Not in the distant future, not after an election, and not trusting someone else in Washington to do what they think is best. This is our industry, these are our copyrights, this is our business, and this is our livelihood. And this is our time. The report opens with a comment, “The Copyright Office believes that the time is ripe to question the existing paradigm for the licensing of musical works and sound recordings and consider meaningful change.” They also intimate that their proposals be “contemplated together, rather than individually…to create a fairer, more efficient, and more rational system for all.” They are asking for you and me to get on this bandwagon…now… and help create change.
You can get involved either individually, or as part of organizations like National Music Publishers Association (NMPA), Nashville Songwriters Association International (NSAI), Songwriters Guild of America (SGA), the newly organized Interested Parties Advancing Copyright (IPAC), or other groups with like interests. The music license system is in great need of repair. The time is ripe for change. This is a call for interested people to get involved. As an old Chinese proverb says, “None of us is as smart as all of us.” You in?
(If you are looking for more information on how you can be involved or any of these organizations, feel free to email me at firstname.lastname@example.org).
John Barker is President & CEO of ClearBox Rights, LLC, an independent rights managements company based in Nashville, TN. He is also Chairman of the Copyright Society of the South. John publishes a blog related to songwriting, publishing and copyright issues which can be found at http://clearboxrights.wordpress.com or www.clearboxrights.com.