The PROs fear the publishers' request could lead to compulsory license legislation
The Robert F. Kennedy Department of Justice Building in Washington, D.C.Almost every organization on the publishing side of the music business supports changes to the consent decrees that regulate ASCAP and BMI, saying it would give them more leverage to negotiate higher "market-based" rates. But they don’t agree on the details.
Up until this letter, the PROs and the NMPA seemingly had remained neutral on what each other was asking the DOJ in the way of changes to the consent decree. In its initial public statement to the DOJ, both ASCAP and BMI said they were studying and consulting with others in the industry about whether the decrees should allow selective withdrawal; while the NMPA used the same kind of language on the issue whether the PROs should be able to handle other rights beyond performance.
In general, sources familiar with the PROs’ thinking say they are not opposed to selective rights withdrawal but wonder if now is the right time for it. That’s because the Music Modernization Act says that Congress must be notified if the DOJ plans to amend or eliminate the consent decrees.
After the DOJ interpretation that said the decrees require 100% licensing, BMI sued the DOJ and the BMI rate court judge ruled that the consent decree neither bars fractional licensing nor requires full-work licensing, which was the opposite of the DOJ's interpretation. An appeals court upheld that court's ruling, much to the relief of the entire music publishing sector.
Currently, direct deals between licensees and publishers can only occur if music users agree to such deals. In other words, the publisher alone can't make such deals occur. That's because if a music user doesn't like the direct deal terms offered, that licensee can just take its chances with the ASCAP and BMI rate court for performances licenses and get coverage under the blanket license.
"Licensees have told us if the selective withdrawal right is granted by the DOJ, then the licensees said they would rather fight it out in Congress," says one PRO source.
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