Because of the rapid change in technology, the societies have begun to experience complications in regards to its negotiations with “new media” music services, i.e., music performed over the internet and through wireless networks.
Because of outdated consent decree requirements these licenses are compulsory and fees may be set retroactively, some music users are delaying the negotiating process, choosing to license music on an interim basis for an indefinite period, thus reducing in many cases the users’ license fees paid to songwriters and publishers. ASCAP and BMI are sometimes forced to accept less favorable outcomes due to limited resources in the very expensive rate court proceedings.
Problems with the current rate-setting process and the inability of the societies to offer bundled rights to music users have led to copyright owners licensing their works directly to music users. In particular, due to the restraints in the Consent Decrees, many ASCAP and BMI members believe that licensing their compositions through ASCAP and BMI does not allow them the opportunity to realize the full value of their copyrights, particularly with respect to the use of their works by streaming music services. The rates that ASCAP and BMI are able to obtain from certain music users (specifically new media services) do not represent fair market value for the use of their compositions.
The consent decrees should be modified to allow publishers and songwriters the right to directly license certain categories of performance rights while allowing ASCAP and BMI the right to license other performance rights categories. ASCAP and BMI should be more transparent in how they account to writers and publishers for performance income, such that the average person can understand these calculations.
Expedited arbitration proceedings potentially serve two purposes. First, both music creators and music users benefit from a more definite timeline and generally a less expensive resolution of fee disputes. Arbitration promotes the resolution of private rate disputes without unnecessarily burdening the courts with complex, industry-specific issues. Further the amount of time necessary for determination of a final outcome is shortened. Expedited arbitration may eliminate the need for interim fee proceedings altogether.
New innovations have shown that outdated regulations restrict the societies’ ability to efficiently license the rights for the use of songs to music users on behalf of songwriter and publisher members. Without substantive changes to the Consent Decrees, many of the larger copyright owners may soon abandon the collective system provided by the PROs with the goal of achieving competitive rates on their own.