US Copyright Office wants to change the music licensing
The United Sates music industry is preparing for a major overhaul of its copyright framework following the disclosure on February 5 by the US Copyright Office of its proposals to modernise the music licensing system. The proposals are contained in a 246-page report titled Copyright And The Music Marketplace. The Copyright Office said that the report not only provides “an exhaustive review of the existing system,” but also makes a number of recommendations “that would bring both clarity and relief to songwriters, artists, publishers, record labels, and digital delivery services”.
The copyright Office acknowledges that if there is “broad consensus across the music industry on a number of key points,” there is “less agreement as to how best to move forward.”
The Copyright Office’s recommendations cover a wide range of issues, such as the existing statutory licenses, the role of performing rights organizations, terrestrial performance rights for sound recordings, federal protection for pre-1972 sound recordings, access to music ownership data, and the concerns of songwriters and recording artists.
“These recommendations present a series of balanced tradeoffs designed to create a more rational music licensing system for all,” notes the Copyright Office. “Few would dispute that music is culturally essential and economically important to the world we live in,” said the US Register of Copyrights Maria Pallante, “but the reality is that both music creators and the innovators who support them are increasingly doing business in legal quicksand. As this report makes clear, this state of affairs neither furthers the copyright law nor befits a nation as creative as the United States.”
Some of the recommendations include:
– Regulate musical works and sound recordings in a consistent manner: sound recordings and the underlying musical
– Extend the public performance right in sound recordings to terrestrial radio broadcast.
– Fully federalise pre?1972 sound recordings so that they fall under federal jurisdiction and no longer in legal loopholes allowed by some states.
– Adopt a uniform market-based rate setting standard for all government rates
– Migrate all rate setting to the Copyright Royalty Board (currently federal courts fix performance rates)
– Establish transparency in direct deals
The report also proposes groundbreaking changes to update the Consent Decrees system that has governed the way performance rights organisations (PROs) operated by:
– Permitting opt-out from PROs for interactive streaming, which is a a request from music publishers
– Allowing bundled licensing of mechanical and performance rights. This would allow PROs and other entities to become music rights organizations (“MROs”), authorised to license both performance and mechanical rights.
– In addition to MROs, the Office recommends the creation of GMOR, or general MORs, that will act as hubs for the MROs. The GMRO would be responsible for maintaining a publicly accessible database of musical works represented by each MRO.
The GMRO would also serve as the default licensing and collection agent for musical works that licensees were unable to associate with an MRO or opt-out publisher
– Establishing blanket licensing for digital uses
The reactions from industry organisations was mixed. All parties commended the Copyright Office for its attempt to take a comprehensive view at licensing, but the comments were more nuanced when it came to the recommendations.
“The report bolsters much of what the publishing and songwriting industries have long said, that the legal framework devised over 100 years ago should not be applied to the music licensing landscape of today,” said NMPA president and CEO David Israelite. “We applaud the recognition that music creators should be fairly compensated. However, while there is much to like in this report, we hope that Congress rejects any further regulation of songwriters. It is critical that songwriters are given the freedom of other intellectual property owners – to sell their creations in a free market. Until they can do so, they will continue to be treated unfairly by the very industry they fuel.”
ASCAP chairman and President Paul Williams noted that the current system “undervalues musical works” and was inefficient. “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,” said Williams. “As we continue to advocate for our members in Washington, today’s report is an important step towards meaningful reform.”
RIAA chairman and CEO Cary Sherman, commented: “The Copyright Office has made an important contribution to the ongoing conversation about modernizing the copyright laws. They have given all of us in the music community a lot to digest and reflect upon. As the economic engines of the broader music industry, record labels look forward to participating in this ongoing discussion and working toward reform that will both modernize the outdated music licensing system and more accurately reflect the investments and value that the various stakeholders bring to the music marketplace.”
The RIAA is asking in particular the legislators to grant rights owners a performance right for terrestrial radio on sound recordings and to rule on the situation of pre-1972 recordings on which digital services such as Pandora and Sirius do not pay royalties.
“The establishment of a terrestrial performance right and the guiding principle of fair market pay for songwriters, artists and producers are important foundations of this new report,” said Neil Portnow, President/CEO of the The Recording Academy. “We now call on Congress to implement common sense, pro-creator reforms in a comprehensive legislative approach.”
Source: Music Week
