The Copyright Office recently issued a Notice and Request for Public Comment on a study that they have commenced on music licensing in all of its forms.  We’ve written about the complexity of the music licensing process many times, and about proposals for reform.  Many of these proposals have been issued in connection with the speeches of Copyright Register Maria Pallante’s discussion of copyright reform (see our article here), and the subsequent Green Paper on Copyright issued by the Patent and Trademark Office (see our article here).  This Notice appears to be one more step in this overall review of copyright underway throughout the administration and in Congress.  The Notice released by the Copyright Office is wide-ranging, and touches on almost every area of controversy in music licensing.  Comments are due on May 16, and the Copyright Office promises to hold roundtable discussions to further explore the issues in music licensing.

The issues on which the Copyright Office asks for comments deal both with the licensing of the musical composition or musical work (the words and music of a song) and the sound recording (the song as actually recorded by a particular artist).  The request deals with both the public performance right for musical compositions, usually licensed through ASCAP, BMI and SESAC, and the rights to make reproductions of the works, which are usually licensed by the music publishers, sometimes through organizations like the Harry Fox Agency.  On the sound recording side of the music world, the rights are usually licensed by the record company except for the public performance royalties paid by non-interactive music services, which are collected in the United States by SoundExchange. 

The issues about which the Copyright Office asks questions on the musical composition rights include:

  • Whether the Section 115 “mechanical right” should function more like a blanket license where a music service could pay a flat fee to some collection agency for the rights to make reproductions of various musical compositions (see this article on the recent settlement on mechanical royalty rates)?
  • How well are the current consent decrees on ASCAP and BMI working, and should there be modifications to continue to encourage blanket licensing (especially as some large publishing companies have indicated that they are interested in withdrawing from ASCAP and BMI to get higher direct licensing fees)
  • Should there be a single stop for licensing both the rights to the reproduction and the public performance right (perhaps suggesting the resurrection of an idea floated a decade ago by the Copyright Office to allow ASCAP and BMI to license reproductions as well as public performances of musical works).
  • Should the royalties paid for the public performance of sound recordings be taken into account in assessing the amount of the royalties paid for the performance of musical works (a proposal advanced recently in the Songwriters Equity Act introduced in Congress, and sponsored by songwriters who have seen the amount of sound recording performance royalties and feel that they are being underpaid).

For sound recordings, questions include:

On general issues for all music rights, the office asks:

  • Should there be common standards used in all the music royalty determinations (see our article here about the difference between the 801(b) factors versus the willing buyer willing seller standard)
  • Should the law require platform parity on royalties (perhaps implicating the broadcast performance royalty)
  • Is direct licensing expanding, and should it be encouraged?
  • What is the economic effect of all of these issues on artists and musicians, and on distributors and other financial investment in the music industry?
  • Should the government encourage a universal means of identifying musical compositions and sound recordings?

These are complicated issues with many facets to each issue.  I’ll be moderating a panel at the RAIN Summit West on Sunday dealing with many of these issues.  For more information about the Summit, see their website here