HITS Daily Double


UPDATE: In response to the bipartisan Music Modernization Act, introduced in Congress on 12/21 by Reps Doug Collins (R-GA) and Hakeem Jeffries (D-NY), the following statement was issued by NMPA President & CEO David Israelite, ASCAP CEO Elizabeth Matthews, BMI President & CEO Mike O’Neill, NSAI President Steve Bogard and SONA Executive Directors Michelle Lewis and Kay Hanley:

“We strongly support the introduction of the Music Modernization Act which represents months of collaboration and compromise between the songwriting and tech industries. This legislation enables digital music companies to find the owners of the music they use and reforms the rate setting process for performing rights, ensuring that songwriters and music publishers are paid faster and more fairly than ever before

“For too long, digital music services have taken advantage of the ‘bulk NOI’ process and often failed to find the correct creators to pay, and now – by working together – this bill ends this practice by creating a private-sector system where money will no longer be lost to inefficiencies and lack of information. The bill also improves how mechanical royalty rates are calculated by introducing a willing-seller/willing-buyer standard.

“On the performance rights side, the bill also replaces the current rate court system with the random assignment of judges used in most federal court cases, and allows the rate courts to review all relevant market evidence into the valuation of how songwriters are compensated.

“We thank Congressmen Collins and Jeffries for their leadership in striking this balance that improves and modernizes our outdated licensing system and gives songwriters the ability to be paid what they deserve across all platforms that use music, including the growing interactive streaming services.”

In what's being touted as a win for PROs and publishers, the 2nd Circuit Court of Appeals has ruled that fractional licensing is permitted and not (as the Justice Department had previously held) forbidden by prior consent decree. BMI and ASCAP had objected to that decision, which ruled that 100% (or "full works") licensing was required under the decree; in other words, no one participant in a composition could offer rights on behalf of the rest.

On 12/19, U.S. District Court Judge Louis Stanton upheld the PROs' interpretation, with backing from the Jeff Sessions-led DOJ.

DSPs had supported the old ruling, saying that their businesses would be impaired by fractional licensing and that it would give music pubcos "inordinate market power."

"[S]ince the decree is silent on fractional licensing, BMI may (and perhaps must) offer them unless a clear and unambiguous command of the decree would thereby be violated," Judge Stanton's ruling reads in part.

"This is a massive victory for songwriters, composers, music publishers and the entire industry,” exulted BMI President/CEO Mike O’Neill. “We thank all the songwriters, composers, publishers and organizations who supported us throughout this process, which unfortunately, has been a nearly two-year distraction from our original intent which was to update our outdated consent decree and modernize music licensing."

David Israelite, President & CEO of the National Music Publishers' Association, issued the following approving statement:

Today’s affirmation of Judge Stanton’s decision is vindication for all songwriters and music publishers that the Justice Department overreached when it wrongly claimed that split works should be licensed on a 100% basis. DOJ’s disastrous interpretation was an attack on songwriters and we congratulate BMI and the industry effort on successfully fighting against this massive government overreach. We are encouraged it is a new day at the Justice Department with new leadership that we trust will respect the rights of songwriters and ultimately address the larger problems with the outdated WWII-era consent decrees that continue to harm music creators.

Sessions was said to be busy drafting a law banning dancing by women but his office expressed thanks for the acknowledgement.

In other music-legislation news, a consortium of artists gathered under the Content Creators Coalition banner has urged Congress to pass the so-called CLASSICS Act, which is designed to protect creators of pre-1972 compositions.

The group includes T Bone Burnett, Kris Kristofferson, John Prine, Bette Midler, Bonnie Raitt, Emmylou Harris, Henry Rollins, Debbie Harry, Chris Stein, Clem Burke, John Doe, Jeff Tweedy, Mary Chapin Carpenter, Rosanne Cash, Ry Cooder, Rodney Crowell and more.

Under current rules, the artists say, digital radio exploits loopholes that prevent said creators from being fairly compensated. Their statement is as follows:

Digital radio makes billions of dollars a year from airplay of music made before 1972. Yet, because of an ambiguity in state and federal copyright laws, artists and copyright owners who created that music receive nothing for the use of their work. The ‘CLASSICS Act’ would correct this inequity and finally ensure that musicians and vocalists who made those timeless songs finally get their due. We urge Congress to pass the CLASSICS Act and other pro-artist reforms quickly.