Bicycle music company’s public comment on collective rights management rules review

Under the consent decrees, for an end-user to obtain a blanket license it need only write a letter to ASCAP or BMI asking to do so. While the ensuing blanket license process is a highly efficient means of clearing music rights for use in the media, rates are sometimes disputed in the rate court where prior licenses are cited to help the rate court determine a reasonable fee for the music user.

When the parties cannot agree to an actual or interim rate then the performing rights organizations need to bring a motion to their rate courts. This sets in motion a lengthy and expensive process where the end-user gets to use the repertoire while the rates for that use are disputed.

While this process had worked in the past when the media consisted of mature broadcasting platforms such as radio and television, in today’s digital age of rapidly evolving platforms the process is unnecessarily slow, inefficient, and can result in below-market rates for these new media that are unfair to the creators and owners of music rights.

In exchange for immediate access to independent publisher’s repertoire, it is only reasonable that there should be some form of financial consideration required from the onset for the use of independent publisher’s music even in the event of rate disputes, and it would seem arbitration would be a much more expedient and efficient forum in which to resolve such disputes.

Below-market fees borne from this antiquated process have recently caused some major music companies to seek to license their own repertoire for digital use. While this is a viable option for very large companies, independent companies such as Bicycle lack the enormous economies of scope and resources that a few major publishing companies have to identify, license and monitor the use of their repertoire by many thousands of digital broadcasters.

In short, Bicycle relies tremendously on the efficiency and value that ASCAP and BMI offer as single-stop destinations for thousands of commercial music users wishing to avail themselves of Bicycle’s repertoire through the blanket licenses offered by these organizations. Yet with the current consent decrees in place, this also means that independent publishers can easily be put in the position of having to accept below-market license fees and sometimes no fees at all, while commercial users of their music dispute royalty rates for an indeterminate period of time.

Any publishing company that wishes to issue its own digital rights should be able to do so rather than being forced to have “all or nothing” licensed by the performing rights organization as was recently determined by the rate courts. As many large companies have already set out to do so, and rights agencies new and old from around the world are now competing to offer these services in a rapidly changing and global digital marketplace, it is evident that ASCAP and BMI no longer have the market power that the consent decrees were originally intended to mitigate.

As such, and with so many companies seeking to establish fair value for their music in the open and unregulated market, ASCAP and BMI should be able to do the same for the benefit of independent music publishers and without the encumbrances imposed by their current consent decrees.

ASCAP and BMI consent decrees should be modified to reflect the realities of the current marketplace. Rate courts should be eliminated and replaced with a more expedient and efficient process that is fair to creators and music owners and that thereafter the consent decrees be reviewed periodically, should they remain necessary at all, to ensure that they stay in sync with rapidly changing market conditions.