WASHINGTON — Major music organizations agree on the need for free market competition, but disagree on the changes that need to be made in the digital age in the licensing for songwriters.
Music experts, testifying Tuesday before the Senate Judiciary subcommittee on antitrust, competition policy and consumer rights, said consent decrees for songwriters and composers seem out of date with today’s technology, leaving songwriters at the short end of the stick in terms of royalties.
To Elizabeth Matthews, CEO of the American Society of Authors, Composers and Publishers (ASCAP), a free market involves a willing buyer and willing seller. Either party has the option walking away, or negotiating a fair price.
Matthews says that is not the case today because performance rights groups, such as her own, entered into a consent decree with the Justice Department in the 1940s that limits the organization’s ability to adjust rates for songs that are broadcast and recorded — or to walk away from unwanted licensing agreements.
The decree mandates the organizations license the work of songwriters to any parties willing to pay rates set by U.S. district judges. It was “last updated before the invention of the iPod,” Matthews said.
“People no longer buy the music, they love, they stream it,” Matthews told the committee.
“If streaming music is the future, then songwriters and composers need to be concerned,“ said Matt Pincus, CEO of SONGS Music Publishing.
Songwriters are responsible for many of the top tunes sung by major artists and broadcast on the radio. They usually don’t have salaries but make a living of off public performance royalties.
In 2015, many digital media companies do not pay songwriters a fair market price, causing music publishers to withdraw catalogs from organizations like the American Society of Authors, Composers and Publishers, and Broadcast Media Incorporated.
Chris Harrison, vice president of business affairs for Pandora, an Internet radio company, talked about the need for a publicly available database to house all relevant music copyright information and to foster market competition and transparency.
Matt Pincus recommended changes that help songwriters, such as altering rate setting procedures and giving music companies the ability to license digital services themselves.
Mike Dowdle of the National Association of Broadcasters, said he doesn’t want major changes in the consent decrees.
“Without these decrees, no fair competitive market would exist,” said Dowdle.
He said broadcasting companies must have the public performance rights to a full catalog of music in order to avert lawsuits. According to Dowdle, the performance rights organizations need to “be respective of the songs people actually use.” To generate their own rates for songwriters’ work doesn’t make sense, he said.
Music experts generally don’t want to disband of consent decrees altogether, but prefer modifications with the goal of a fair competitive market.