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1 1 (March 17, 2020)

handle is hein.crs/govchxv0001 and id is 1 raw text is: FF. ' riE S-' $. h ,i . , March 17, 2020 Music Licensing: The ASCAP and BMI Consent Decrees On June 5, 2019, the U.S. Department of Justice (DOJ) announced that it was opening a review of two consent decrees that play a critical role in the music industry. The decrees regulate the copyright licensing activities of the two largest U.S. performing rights organizations (PROs): the American Society of Composers, Authors and Publishers (ASCAP) and Broadcast Music, Inc. (BMI). DOJ is to consider whether or not to pursue modifications to, or termination of, the consent decrees. The U.S. District Court for the Southern District of New York (SDNY) would need to approve any proposed changes to the consent decrees. PROs enable lyricists and composers (referred to collectively here as songwriters) and music publishers to collect royalties when copyrighted musical works are performed publicly, that is, when music is played on the radio, through a streaming service, or in a nonprivate setting. As a result of antitrust lawsuits, however, ASCAP and BMI have long operated under consent decrees with DOJ, which constrain their activities. Changes to or termination of the consent decrees could significantly affect the amount of money that radio stations, orchestras, restaurants, cafes, clubs, and other businesses pay to perform musical works publicly, as well as the amount of money that songwriters and publishers receive for their works. Copyright attaches to a work upon its creation and fixation in some tangible medium of expression, such as in a score or a digital or analog recording. While copyright exists from the moment a person creates and fixes a work, copyright holders must register their works with the U.S. Copyright Office to bring a lawsuit for infringement. For works created today, copyright generally lasts until 70 years after the death of the work's author. Two distinct types of copyrights applicable to music are available under the law. The copyright in a musical work covers the creativity of the music's composer and lyrics' writer. The copyright in a sound recording covers the work of the performers, producers, and engineers of a particular recording. For more information, see CRS Report R43984, Money for Something: Music Licensing in the 21st Century, by Dana A. Scherer. Many songwriters work with music publishers and often assign their copyrights to them. In turn, the publishers pay songwriters an advance against future royalty collections and promote the songs. Under the law, copyright holders have exclusive rights to reproduce their work, distribute it, and perform it publicly. The public performance right prohibits others from streaming, broadcasting, or playing a musical work for public listening without the copyright holder's permission. Thus, any entity or venue seeking to perform musical works publicly generally needs to seek permission (i.e., a license) from songwriters and/or publishers, and typically pays them a fee (i.e., a royalty). Congress first gave songwriters the exclusive right to grant permission for and collect money from public performances in 1897. However, tracking each copyright holder and each public performance was challenging. To address such logistical difficulties, songwriters and publishers formed PROs and assigned PROs their public performance rights. The PROs, in turn, issue public performance licenses on behalf of their member songwriters and publishers. Licensees generally obtain a blanket license, which allows them to perform publicly any of the musical works in a PRO's catalog for a flat fee or a percentage of total revenues. After charging administrative fees, PROs split the public performance royalties they collect among members based on play frequency, among other factors. SESAC and GMR. Two PROs active in the United States are SESAC (formerly the Society of European Stage Authors and Composers), founded in 1930, and Global Music Rights (GMR), founded in 2013. In part because they are not bound by consent decrees, SESAC and GMR differ from ASCAP and BMI in several ways. SESAC and GMR operate as for-profit corporations, and membership is by invitation only. SESAC administers other copyrights in addition to public performance licenses. An organization representing broadcast radio stations, the Radio Music License Committee (RMLC), has asserted that SESAC and GMR have each violated antitrust laws. In 2012, RMLC sued SESAC, claiming that it charged rates disproportionate to the number of works it licenses. RMLC settled its lawsuit with SESAC in July 2015, and the parties agreed to binding arbitration in the event they could not agree to a royalty rate. In 2016, RMLC sued GMR, alleging that licensing its catalog of songs on an all-or-nothing basis was an abuse of market power. GMR countersued RMLC, alleging that RMLC was a buyer's cartel, and contending that its representation of virtually all commercial radio stations was anticompetitive. The lawsuits between GMR and RMLC are ongoing. A federal judge in California is overseeing these lawsuits. ASCAP and BMI. Songwriters formed ASCAP, the first U.S. PRO, in 1914. To strengthen their bargaining power vis-a-vis ASCAP, broadcasters in 1939 founded and financed a competing PRO, BMI. ASCAP and BMI now handle public performance rights for most musical works. Both are nonprofit organizations. Although publishers may affiliate with multiple PROs, each songwriter may affiliate .O 'T gognpo goo g , q 'S a X 11LULANJILiN,

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