In recent weeks, some of the radio trade magazines have been carrying coverage of the litigation between the Radio Music License Committee (RMLC) and ASCAP and BMI over the rates that will be paid by commercial radio broadcasters for the public performance of musical compositions that are licensed through these Performing Rights Organizations (PROs).   Negotiations over royalty rates are not new nor is the occasional litigation over those royalties However, because of changes in the law governing these processes, the arguments raised this year  are different and raise important new questions about what could be the first steps toward an entirely different, and perhaps fairer, process for resolving the royalties that broadcasters (and others) pay for the use of music.

What is different, and what are the arguments being made?  RMLC is arguing that the US District Court that oversees the antitrust consent decrees that govern ASCAP and BMI should consolidate the proceedings to determine the rates that broadcasters will pay, rather than considering those rates in separate proceedings.  If parties cannot agree with ASCAP and BMI as to the rates to be charged for the use of music for a particular purpose, a judge from the US District Court in the Southern District of New York conducts a proceeding as a “rate court” to determine a reasonable royalty rate, much as the Copyright Royalty Board does in establishing SoundExchange royalties for the digital public performance of sound recordings.  Because both the ASCAP and BMI agreements with the commercial radio industry have expired, proceedings are underway to determine the rates that radio will pay to these organizations. Continue Reading RMLC Requests Consolidation of ASCAP and BMI Proceeding on Radio Music Royalties – A Step Toward a Unified Process for Resolving All Music Royalty Issues? 

Here are some of the regulatory developments of significance to broadcasters from the last week, with links to where you can go to find more information as to how these actions may affect your operations.

  • Global Music Rights (GMR) and the Radio Music Licensing Committee (RMLC) announced that enough broadcasters had agreed to GMR licensing

BMI and the Radio Music License Committee announced a settlement of their rate court litigation over the royalties that commercial radio will pay for the public performance of musical compositions licensed by BMI.  While we have not yet seen the agreement, the press release already raises one issue likely to sew confusion in the broadcast industry – the extent to which the agreement allows the use of music in podcasts.  While the press release says that the BMI license includes the use of music in podcasts, radio stations should not assume that means that they can start to play popular music in their podcasts without obtaining the rights to that music directly from rightsholders.  They cannot, as BMI controls only a portion of the rights necessary to use music in podcasts and, without obtaining the remaining rights to that music, a podcaster using the music with only a BMI license is looking for a copyright infringement claim.

So why doesn’t the license from BMI fully cover the use of music in a podcast?  As we have pointed out before, a broadcaster or other media company that has performance licenses from ASCAP, BMI, SESAC and even GMR does not get the right to podcast music – nor do the SoundExchange royalty payments cover podcasts. These organizations all collect for the public performance of music. While podcasts may require a performance license (see our article here about how Alexa and other smart speakers are making the need for such licenses more apparent as more and more podcast listening is occurring through streaming rather than downloads), they also require rights to the reproduction and distribution of the copyrighted songs and the right to make derivative works – all additional rights given to copyright owners under the Copyright Act. These additional rights are not covered by the public performance licenses from ASCAP, BMI, SESAC, GMR and SoundExchange, nor are the rights to use the “sound recording” or “master” in the podcast. What is the difference between these rights?
Continue Reading BMI Settlement of Royalty Battle with RMLC to Include Music in Podcasts? – Not So Fast….

In the last week, we have received many inquiries from radio stations that received a notice from attorneys for Global Music Rights (GMR) about document production in GMR’s litigation with the Radio Music License Committee (RMLC).  As we have written before (see, for instance, our articles here, here and here), RMLC and GMR have for several years been engaged in antitrust litigation.  RMLC is seeking to impose outside review on the rates that GMR can charge broadcasters for the public performance of the music written by the songwriters that they represent, while GMR argues that RMLC itself violates the antitrust laws by unifying competing broadcasters and preventing them from doing business with GMR.

The recent communications from GMR concern GMR’s obligation to produce documents to the RMLC’s attorneys in discovery in this litigation.  Because RMLC has not been directly involved in GMR’s dealings with radio stations over the interim license agreements (and because RMLC itself does not have copies of the interim licenses that stations entered into with GMR), RMLC’s lawyers asked GMR for the production of these licenses as part of their discovery.  Because the interim licenses contain some confidentiality language, GMR’s recent communications was to let stations know that they are planning to produce those licenses to the RMLC’s attorneys, subject to the Protective Orders that GMR attached to their messages.  These Protective Orders are designed to keep the information in those licenses out of the public record, to be reviewed only by a limited group of people including RMLC’s attorneys and expert witnesses. The GMR communications are asking broadcasters if they have objections to the production of these licenses to RMLC’s lawyers.     
Continue Reading Radio Stations Receive Inquiries from GMR on the Production of Interim Licenses – What Is this All About?

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.
Continue Reading GMR Sues Entravision for Royalty Payments – Looking at the Issues Raised By This New Development in the Music Royalty Wars

Recently, the Radio Music License Committee sent out a memo to broadcasters about a July 8, 2019 SoundExchange payment deadline for pre-1972 sound recordings.  As with everything in copyright law, the issues surrounding pre-1972 sound recordings are complicated, and the RMLC notice, while seemingly straightforward, still resulted in our receiving lots of questions.  These questions may have been compounded because of notices sent to broadcasters back in April about another filing deadline concerning these recordings which caused much consternation for what was, for most broadcasters, a matter of little concern.  For most broadcasters, neither of these dates are of particular concern unless the broadcaster has been identifying pre-1972 sound recordings and not paying SoundExchange royalties when those songs are streamed, and we understand that most broadcasters have in fact been paying SoundExchange for these recordings.  But let’s try to explain what is going on in a little more detail.

First, let’s look at the basics.  Sound recordings (the recording of a particular band or singer performing a song) were originally not covered by federal copyright law.  The law provided protections for “musical works” (i.e. the musical composition, the words and musical notes of the song), but the mere recording of that work was initially not seen as a creative work.  It was thought of more as a mechanical rendering of the real creative work – the underlying song.  So when recordings came to have real value in the first half of the last century, recording artists had to rely on state laws to prevent other people from making and distributing copies of their recordings. Laws against what we would refer to as bootlegging or pirating of recordings were passed in most states, and lawsuits against bootleggers would be brought under these state laws.  It was not until 1972 that Congress, through an amendment to the Copyright Act, recognized that the recordings were themselves creative works entitled to copyright protection.  But that amendment did not fully make all pre-existing recordings subject to the Copyright Act, instead leaving most sound recordings first recorded in the United States prior to the adoption of the amendment to the Act in February 1972 subject to state laws until 2067.
Continue Reading Pre-1972 Sound Recordings and the July 8 SoundExchange Filing Deadline

This week, the lawsuit brought by the Radio Music License Committee (RMLC) against new performing rights organization GMR (Global Music Rights) for alleged violations of the antitrust laws was determined by a court in Pennsylvania to have been brought in the wrong place – and transferred to a court in California.  This case has been on hold for well over two years while this procedural question was ironed out.  Now that the case has been transferred to California, the litigation that has been on hold while the jurisdictional issue was resolved can begin – but don’t expect quick results as these complicated cases can take years to resolve.  What is involved in this case?

Back in 2016, when RMLC concluded that it was not likely to reach a negotiated royalty rate for radio’s use of the musical compositions controlled by GMR songwriters and publishers, it brought the Pennsylvania court action.  In that action, it argued that the rates that GMR wanted were an abuse of the market power that GMR was able to exercise by banding these songwriters together and offering a license to radio stations on an all-or-nothing basis (see our articles here and here for more on the initial suit).  As it had done successfully with SESAC (see our article here), and as has been the case for decades with ASCAP and BMI, RMLC had hoped to have the court declare that GMR’s unrestrained royalty demands were contrary to the antitrust laws, and that some limits should be imposed on those rates.  The RMLC suit against GMR was brought in the same Pennsylvania court in which RMLC had sued SESAC, which led to the settlement subjecting SESAC rates to arbitration if the parties could not voluntarily agree on rates (and the arbitration process ultimately resulted in significantly lower rates for commercial radio than SESAC had previously received – see our article here on the results of the arbitration).
Continue Reading Music Rights Suit by Radio Music License Committee Against GMR Moved to California Courts – No End in Sight?

This week, the Radio Music License Committee issued a press release that states that Global Music Rights (“GMR”), the new performing rights organization that collects royalties for the public performance of songs written by a number of popular songwriters (including Bruce Springsteen, members of the Eagles, Pharrell Williams and others) has agreed to extend their

Yesterday brought news that a Federal Magistrate issued a ruling (a 42 page order discussing fine points of law) deciding that the antitrust lawsuit brought by RMLC against GMR should not be tried in the Pennsylvania court where the suit was brought. As we wrote here, RMLC (the group that represents many commercial radio operators in music licensing matters) had argued that GMR (a relatively new organization representing songwriters in licensing music use as do ASCAP, BMI and SESAC) was acting in violation of the antitrust rules by trying to license music from a number of songwriters at prices well in excess of the amount that corresponded to these artists’ share of radio airplay. GMR seemingly retaliated by suing RMLC in a Los Angeles court, arguing that RMLC itself violates the antitrust laws by functioning as a buyer’s cartel unifying music licensing buyers against these songwriters (see our article here). Since these dueling suits were filed, the parties have been fighting over where this case should be heard.

RMLC had brought their case in Pennsylvania both because a number of RMLC members operate in Pennsylvania and because RMLC had obtained a favorable result in that court in similar litigation against SESAC, leading to the arbitration process that substantially decreased the rates that the commercial radio industry pays to that organization (see our article here). GMR sued in California as it is headquartered there, and presumably thought that it might get a bit of a “home court advantage” by trying a case in a state a bit more disposed toward content creators. So what does the decision yesterday mean?
Continue Reading Magistrate Rules RMLC Suit Against GMR Should Not Be Litigated in Pennsylvania – What Does that Mean for Radio Companies?