American music rightsholders are celebrating after the US Copyright Office issued a new report recommending an overhaul of the way artists and songwriters are paid in the world’s biggest music market.
But it’s a 254-page document, so we’re going to go ahead and assume you might not be able to find the time to read it all.
Handily, the USCO provides some useful summing up at the end of the report, in the form of the below infographics.
They show, essentially, what’s been recommended. And to help add to your understanding, here’s six key proposals from the document:
- Extend the public performance right in sound recordings to terrestrial radio broadcasts. At the moment, sound recordings in the US don’t require a payment of a performance fee when they’re played on the radio and TV. This pretty much differs from everywhere else on the planet. The Copyright Office recommends fixing this oversight, adding that ‘the exemption of terrestrial radio from royalty obligations harms competing satellite and internet radio providers who must pay for the use of sound recordings’.
- Fully federalize pre‐1972 sound recordings. Amazingly, record labels and artists are not paid for performances/plays of pre-1972 recordings by digital radio services. The USCO says the ‘lack of federal protection for pre‐1972 sound recordings impedes a fair marketplace’. The songwriters and publishers behind these recordings are currently paid for the same uses.
- Allow bundled licensing of mechanical and performance rights. Says the USCO: ‘Although bundling of sound recording rights occurs as a matter of course, various legal restrictions have prevented that same development on the musical work [songwriting] side. The Office believes that the government should pursue appropriate changes to the legal framework to encourage bundled licensing… This could include allowing the PROs and other entities to become music rights organisations (“MROs”), which would be authorized to license both performance and mechanical rights.’
- Permit opt‐out from PROs for interactive streaming. The Office believes that music publishers should be able to withdraw specific categories of licensing rights from the PROs. Until publishers can legally negotiate directly with digital platforms, it suggests that withdrawal of performance rights should be limited to those rights the record labels are free to negotiate — essentially, interactive streaming rights for digital services.
- Streamline interim rate-setting and require immediate payment of royalties. Under the current US consent decrees, anyone who applies for a music license has the right to perform musical works in a PRO’s repertoire— without paying the PRO any compensation — pending the completion of rate court proceedings. The Copyright Office believes that there should be a streamlined mechanism to set an interim royalty rate, and that the licensee should have to start paying immediately.
- Migrate all rate-setting to the Copyright Royalty Board (“CRB”). The Copyright Office believes that allegations of anti-competitive conduct amongst BMI, ASCAP and SESAC are worthy of evaluation separate and from the determination of fair rates for musical works. The Office proposes that the function of establishing rates for the public performance of musical works — currently the province of federal district courts under the consent decrees — be migrated to the government’s CRB.
Music Business Worldwide