Global Music Rights (most commonly known as GMR), the newest of the major performing rights organizations (PROs) licensing public performances of musical compositions, filed a lawsuit against radio operator Entravision Communications earlier this month. The suit alleges that Entravision failed to pay GMR royalties for the public performance of hundreds of compositions written by GMR songwriters. According to the complaint, GMR sent Entravision several letters over the last few years, notifying Entravision that it was playing GMR music and asking that it enter into a license to play that music. When no license was signed or even requested after these multiple requests, the lawsuit was filed.
The suit seeks $150,000 for each copyrighted work that was allegedly infringed – the maximum set out by the Copyright Act for “statutory damages,” i.e. damages that can be collected even without providing evidence of actual harm caused by the alleged copyright infringement. While Courts have discretion to order far lower statutory damages than those being sought here, even the threat of such damages have been enough to put many of the original file-sharing music sites out of business. Of course, in this case, these damages are being sought not from some company that provides unlimited downloads of unlicensed music, but from a publicly traded radio company presumably already paying other performing rights organizations for the use of music.
Whenever there is a news story about GMR, I seem to get the question “who are these guys, and why do I have to pay them when I am already paying ASCAP, BMI and SESAC (and SoundExchange) for the public performance of the music that my station plays?” As we have written many times (see, for instance, our articles here and here), GMR is a new performing rights organization founded about 5 years ago to represent a select group of songwriters who the organization seems to believe are “must-have” songwriters in a variety of music formats. Because these songwriters have written songs that span a variety of formats and are requested by listeners to these formats, GMR seems to believe that radio stations and other music users will be compelled to pay them more on a per song per user basis than users pay for music provided by other performing rights organizations.
GMR continues to litigate with the Radio Music License Committee (RMLC) over whether it should be regulated under some form of antitrust decree to oversee the reasonableness of the royalties it charges. GMR has countersued, alleging that RMLC is itself a “buyer’s cartel” in violation of the antitrust rules. The trial over these claims is not likely to occur until late 2020, so a decision may not be forthcoming for well over a year (see our articles here, here and here on the litigation). In the meantime, most radio broadcasters have been paying interim royalties to GMR, subject to being retroactively adjusted based on the outcome of the litigation (see our article here on the latest extension of the interim royalties).
RMLC alleges that GMR can make the demands that it does for high music royalties only by bundling the rights of all of the artists that it represents on a take it or leave it basis. While any music user could probably get along without music from one or more of the GMR songwriters, when they are all bundled together, a user has difficulty avoiding their music. Thus, RMLC suggests that the rates that GMR charges should be subject to some antirust review as are the rates charged by ASCAP and BMI pursuant to antitrust consent decrees, and by SESAC pursuant to a settlement of similar litigation by RMLC (and TVMLC, the organization representing TV broadcasters on royalty matters)(see our articles here and here on the results of the SESAC lawsuit).
Making the avoidance of GMR music harder is the lack of a consistent database to determine who controls the rights to what song, and fractional licensing (about which we wrote here, here and here), which requires that a music user, in order to perform a song, get the rights from all PROs representing every one of the writers of that song. For many contemporary hit songs, there are many, sometimes as many as a dozen writers, and those writers may well belong to different PROs. For radio stations receiving programming or commercials produced by others, music rights can be even harder, as you never know what music may be included in this programming.
We note that Entravision’s stations are primarily Spanish-language stations. GMR has not had as high a concentration of songwriters in Spanish-language music as they do in many English-language formats. It is interesting that the complaint filed against Entravision principally lists classic rock songwriters as holding the copyrights that Entravision allegedly infringed. It is possible that these songs crept into the company’s programming in commercials or network programming. If that is the case, it would illustrate the virtual impossibility of avoiding all GMR writers – an issue raised by the RMLC in its antitrust litigation.
With these issues in mind, it will be interesting to watch how this case, and the RMLC antitrust litigation develop in the coming months. But, while this all develops, it also sends a signal to music users that, to avoid the costs of litigation, they cannot ignore the royalty demands from GMR.