Shockwaves ran through the US music publishing industry yesterday after the Department Of Justice refused to change key elements of the market’s consent decrees.
The likes of Sony/ATV, Universal Music Publishing Group and Warner/Chappell have been lobbying the DoJ for more than two years to alter the consent decrees.
In particular, these companies – alongside Kobalt and others – have been calling for publishers to be allowed to negotiate their US digital rights outside of the blanket licences offered by the territory’s two biggest PROs, ASCAP and BMI.
The DoJ has now officially stonewalled this request.
In addition the DoJ ruled that both ASCAP and BMI must accept 100% licensing – meaning that if a licensee clears a track with one writer, it doesn’t need to bother doing so with his or her co-writers or co-publishers.
Music publishers don’t tend to much like 100% licensing, as it gives power to a licensee to shop around a track’s multiple writers to try and get the best deal – and also means one publisher is duty bound to administrate money for co-writers who may not be signed to their company.
No surprise Sony/ATV Chairman and CEO Martin Bandier was displeased by the DoJ ruling: he has been calling for publishers to be permitted to negotiate their own digital rights, as well as fighting against the spectre of 100% licensing.
“This decision is going to cause a tremendous amount of uncertainty.”
Martin Bandier, Sony/ATV
“We are incredibly disappointed by the unjust way the Department has decided to interpret the consent decrees,” he said in a statement.
“Its decision is going to cause a tremendous amount of uncertainty and chaos in a market place that has worked well for years and will adversely impact everyone in the licensing process, including PROs, licensees, music publishers and most of all songwriters who can ill afford to hire lawyers to figure out their rights under this inexplicable ruling.
“The decision raises more questions than answers.”
One of those questions: if publishers aren’t allowed to pull their digital rights out of ASCAP and BMI, and are forced into a 100% licensing structure they do not want… will they be forced to leave these blanket licences entirely?
What would that mean for the shape of the entire US publishing market – and could rivals who are unbound by the consent decrees, such as SESAC and Irving Azoff‘s Global Music Rights, benfit?
Before such drastic outcomes reach the realms of possibility, there may be respite: first, both ASCAP and BMI have to accept the DoJ’s new version of the consent decrees for them to move forward.
If either party refuses, they could end up in court facing the DoJ on an anti-competitive activity charge – a scary place to be, but perhaps, with their key members up in arms, a risk worth taking.
In addition, even if the PROs do accept the new DoJ-approved consent decrees, publishers could get a chance to contest them in ASCAP and BMI’s own rate courts.
Whatever the conclusion of such machinations, the future of the US music publishing industry is looking far less certain than it did at the start of this week.Music Business Worldwide
