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Lawmakers look for online music licensing alternatives

Grant Gross | March 11, 2015
Songwriters, music licensing services call for changes that would allow more negotiations.

Hearing participants gave examples of the separate rates for songwriters and performers in streaming music. For the country hit "Southern Girl" by Tim McGraw, Pandora paid about $7,000 to a group of songwriters and publishers, including Miller, in 2014, Harrison said. By contrast, Pandora paid nearly $90,000 to McGraw and his record label.

That disparity is driving calls for change in music licensing, Harrison acknowledged. "At the end of the day, if Pandora is paying 50 percent of its revenue to the record labels, and the solution is to pay 50 percent of the revenue to the publishers [and songwriters], I can't make that up on volume," he said.

Just last week, a group of lawmakers introduced the Songwriter Equity Act, which would require the Copyright Royalty Board to consider new factors when setting licensing rates for streaming music, music downloads and sales on CDs.

The bill, championed by Senator Orrin Hatch, a Utah Republican who dabbles in songwriting, would require the board to determine a fair market value for digital music and consider factors such as the performing artist's level of compensation when setting the songwriter royalty rate.

While representatives of ASCAP, BMI and SONGS Music Publishing called for changes to the antitrust decrees and online royalties, some other witnesses at the Senate hearing urged Congress and the DOJ to be cautious.

Any moves toward more negotiated licensing deals could mean major compliance headaches for bars, restaurants and retail stores that play music in the background and for TV stations that have music playing in programming they don't directly control, including commercials, syndicated programming and live sports events, said Mike Dowdle, general counsel at TV station owner Bonneville International.

The consent decrees also help ensure that consumers have access to music, added Jodie Griffin, a senior staff attorney at digital rights group Public Knowledge. The decrees "allow new digital music platforms to launch and legally perform songs without becoming beholden to ASCAP or BMI," she said.

 

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