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PRS for music’s public comment on collective management rules review

Any restrictions on ASCAP or BMl’s ability to administer PRS’s repertoire effectively in the US will directly prejudice the royalties flowing to PRS’s members and undervalue PRS’s members’ musical works in the US.

Specifically, if the rules do not allow members to decide whether it would be more efficient to appoint ASCAP or BMI for certain types of exploitation of the performing right but not others, there is a real risk that major members will withdraw completely from ASCAP and BMI, which would result in ASCAP and BMl’s repertoire becoming less valuable: this could lead to a reduction of rates achieved in the market on PRS’s behalf by ASCAP and BMI and the application of higher commission rates in order to meet their costs. Clearly, this would be to the detriment of members who may continue to be represented by the US CMOs and by CMOs internationally, particularly the members of PRS.

PRS is therefore very concerned about the way in which the rules, if not revised to reflect the changing market conditions, could prohibitively restrict ASCAP and BMl’s ability to license PRS’s repertoire effectively in the US and prejudicially impact the inter-CMO services market to the detriment of PRS’s members. PRS urges the Department to consider the relevance and the impact of the rules not only on ASCAP and BMI in the US market, but also on the inter-CMO services market and overseas CMOs including PRS.

ASCAP and BMI should each be permitted to accept partial grants of rights -this is in the best interests of rightholders and will better protect and promote competition in the US. PRS urges the Department to align its thinking with the Commission and consider the pro-competitive effect of allowing rightholders to grant rights partially to CMOs: it is in the best interests of rightholders to choose the most efficient way in which to license their intellectual property (i.e. either directly or via an intermediary). Moreover the consequences of not allowing a partial grant of rights to ASCAP and BMI in the US could have a prejudicial effect on the inter-CMO services market.

ASCAP and BMI should each be permitted to participate in the licensing of rights beyond the performing right -this is in the best interests of all stakeholders and will better protect and promote competition in the US. Specifically, many publishers reorganised the way in which they were operating, and chose to appoint one or more CMOs to administer centrally the licensing of their mechanical rights for online/new media services. In parallel, it was necessary for such publishers to conclude agreements with performing right CMOs to license the performing right alongside the mechanical right in licences with online/new media services. As a result, this enhanced competition between CMOs to win mandates from the publishers, therefore incentivising CMOs to improve the efficiency and effectiveness of their services in Europe.

PRS urges the Department to: (i) consider the effect of its review on CMOs that rely on ASCAP and BMI as trading partners; and (ii) ensure consistency with the approach taken in Europe, particularly given the Department’s long history of cooperation with the Commission in aligning the competition laws of the US and the EU.