Copyright Office Proposes Major Licensing Shakeup

The US Copyright Office issued a report on Thursday outlining a series of proposals to change how music is licensed. Should Congress act on the proposals, it would represent the first significant changes to copyright and licensing policy in more than 50 years. The agency’s 245-page report suggests, among other things, reconsidering 75 year-old antitrust decrees for BMI and ASCAP, the two organizations that monitor public performances of copyrighted music. The report also suggests the full federalization of music recorded before 1972, a proposal impacted by several recent lawsuits accusing companies like Sirius XM and Pandora of broadcasting older recordings without compensating their owners.

Perhaps the most important proposals in the Copyright Office’s report involve digital streaming and sales of music, industries that have only been around a little over a decade. A spokesman for the office insisted that they’re not trying to reinvent the music industry completely, but the industry is long-overdue for some serious revamping. “As a number of commenters remarked during the course of this study, if we were to do it all again, we would never design the system that we have today,” the report notes. “But as tempting as it may be to daydream about a new model built from scratch, such a course would seem to be logistically and politically unrealistic. We must take the world as we find it, and seek to shape something new from the material we have on hand.” Below are a series of statements issued by various music industry entities.

From the Recording Industry Association of America:

“The office recognizes a consensus within the industry that the current system for licensing musical compositions is broken.  Reform is necessary to develop new revenue streams for all creators and innovative consumer product offerings for music fans.  The office also recognized that it is time to fix the system to ensure that all creators are paid fair market value for their work, regardless of the platform on which their work is used.  For example, a performance right for FM and AM radio is long overdue.  The fact that a multi-billion dollar broadcasting industry that derives its value from music gets a special interest carve-out from paying artists and labels continues to be indefensible.”

From Pandora Media Inc’s Dave Grimaldi (director- public affairs):

“We believe that greater transparency will benefit artists and music lovers alike, and we look forward to working with the Copyright Office and stakeholders across the industry to advance a bright and thriving future for music. As we have said previously, Pandora would be open to supporting the full federalization of pre-1972 sound recordings under a technology-neutral approach that affords libraries, music services and consumers the same rights and responsibilities that are enjoyed with respect to all other sound recordings.  Full-federalization would also guarantee that the full rights granted to these deserving recording artists, including termination rights under Chapter 3 of the Copyright Act.”

From Paul Williams, president of ASCAP:

“With its report today, the US Copyright Office was clear: the current music licensing system needs reform and fast. The report emphasizes how the current system undervalues musical works – something many of our members experience daily. The many proposed updates – particularly recommendations intended to make the system more equitable for songwriters – underscore yet again the inefficiency of the current system for music fans and creators alike. As outlined in the report, the current marketplace is strained by the 70-year old consent decree regime and is not appropriately responsive to the free market, particularly in our new digital world. As we continue to advocate for our members in Washington, today’s report is an important step towards meaningful reform.”