Record companies are broadcasting their concerns about the current system for licensing music, telling the U.S. Copyright Office that simplifying it would increase revenue for the music industry and help songwriters, composers and publishers receive fair market value for their tunes.
In a 52-page filing with the Copyright Office on May 23, the Recording Industry Association of America wrote that the licensing system isn’t working for the music industry. The group, which counts Universal Music Group Inc., Sony Music Entertainment Inc. and Warner Music Group Corp. among its members, announced May 27 it made the submission as part of the Copyright Office’s study on the effectiveness of the music-licensing system in the digital age.
Despite agreement in the music industry about the need for change, the real challenge is finding consensus among various stakeholders who are trying to improve licensing, says the filing, submitted by RIAA’s digital business chief and general counsel, Steven Marks, and business and legal affairs senior vice president, Susan Chertkof.
“We believe that fixing this system will require all stakeholders to work together to take bold steps, rather than just a little tinkering,” it says.
The RIAA in its filing calls for the end of court-set royalty rates and “right-by-right” licensing. Instead, the group is looking for the rates to come out of negotiations between industry members and is pushing for “blanket licenses” to cover various licenses from parties with overlapping rights.
The licensing system isn’t working efficiently for Spotify AB, Beats Music LLC and other music-streaming services, Marks wrote in a blog post. In order for these companies to give customers access to a song, they must get licenses for the musical work and the sound recording, along with licenses from multiple organizations to copy and perform the music, he wrote. The situation would be similar to “Netflix having to negotiate not just with the motion picture company that created the film, but also with multiple representatives of the author of the book or screenplay,” he noted.
“No system is perfect, and we don’t pretend to have all the answers,” Marks wrote. “But we have some ideas and we’re eager to brainstorm with our industry partners on how to simplify the current musical work licensing system.”
The American Society of Composers, Authors and Publishers, the leading trade group for music creators, also is calling for changes to the music-licensing system. The organization is backing legislation intended to help songwriters, composers and publishers get more money for their music.
The Songwriter Equity Act, versions of which are pending in both the House and the Senate, would make changes within the rate courts and federal Copyright Royalty Board to help songsmiths get fair market value for their songs.
The RIAA didn’t take a position on the legislation when U.S. Rep. Doug Collins, R-Ga., introduced it in February. But Jonathan Lamy, RIAA’s executive vice president of communications and strategic data analysis, said at the time that his organization “welcome[d] Congress’ review of the laws governing music licensing” and “look[ed] forward to working with Congress, our music community colleagues and our distribution partners toward meaningful reform that benefits consumers and creators alike.”
Andrew Ramonas is a reporter for Corporate Counsel, a Legal affiliate based in New York. •