The Long Musical Road Home
As a preview to the 50th Anniversary of the Country Music Awards on November 2, 2016, the Country Music Association released a mashup video of three of its most popular songs. Entitled “Forever Country,” the revisited songs were “Take Me Home, Country Roads,” written by John Denver, Bill Danoff, and Taffy Nivert; “On The Road Again,” by Willie Nelson; and, “I Will Always Love You,” by Dolly Parton. The song soared to number one on the Billboard Hot Country Songs chart.
Unlike John Denver, Willie Nelson, and Dolly Parton, many songwriters do not perform the music they write, depending only on songwriter royalty compensation for their income. In addition to managing the creative aspect of penning notes and words on sheet music, they must also navigate the process of protecting and licensing their intellectual property. In many instances, as in the example of “Take Me Home, Country Roads,” a song can be written by several songwriters and artists through a collaborative effort.
There are three ways in which songwriters are compensated: mechanical royalties, which are paid on musical compositions played on mechanical devices, such as through a digital or physical album; performance royalties, for when the song is played on the radio, television, or in any public setting; and, synchronization royalties, for when a song is used in a TV show, film, trailer, video game, TV commercial, or other video formats. While synchronization royalties are regulated in a free market, the other two royalties are regulated by the federal government.
In order to make it easier for songwriters to have their songs performed and played on radio, TV, or in any public setting, several performing rights organizations (PRO) were created: the American Society of Composers, Authors, and Publishers (ASCAP) was founded in 1914; Broadcast Music, Inc. (BMI), was founded in 1939; SESAC Performing Rights, was established in 1930; and the Society of Composers, Authors and Music Publishers of Canada (SOCAN) was founded in 1990.
In 1941, the Department of Justice (DOJ) issued consent decrees that govern how songwriters are paid for public performances (on radio, TV, or digitally over the internet). The decrees only apply to ASCAP and BMI. ASCAP’s consent decree was last updated in 2001 and BMI’s consent decree was updated in 1994, both long before digital music became so popular and prevalent. But even in this new era, continued adherence to the consent decrees and the rate court decisions mean that the licensing of the songs remains compulsory, and the government – not the marketplace – sets the price of most music license royalties.
In 2014, ASCAP and BMI asked the Department of Justice (DOJ) to review the consent decrees for performance royalties on digital music services, such as Pandora and Spotify, since songwriters receive minimal royalties from those services. DOJ’s June 30, 2016 ruling rejected the request for songwriters to have the ability to remove their catalogue from digital licensing services, maintaining the status quo. DOJ also arbitrarily and capriciously created new restrictions on fractional licensing, by deciding that each PRO could license 100 percent of a song for use, with little regard for whether all of the writers of a song were represented entirely by that particular PRO or how they agreed to divide royalties amongst themselves. This bizarre determination creates an even greater disadvantage to songwriters trying negotiate fair market pricing for their licenses.
On September 13, 2016, the Songwriters of North America (SNA) sued DOJ over the 100 percent licensing provision, alleging that it violated songwriters’ property rights. On September 16, 2016, the BMI rate court judge, Louis L. Stanton overturned DOJ’s decision, finding that the consent decree, “does not address the possibilities that BMI might license performances of a composition without sufficient legal right to do so, or under a worthless or invalid copyright, or users might perform a music composition licensed by fewer than all of its creators.” Judge Stanton further noted that, “The Consent Decree neither bars fractional licensing nor requires full-work licensing.” Because this decision only applies to BMI, ASCAP will need to seek a similar ruling from the ASCAP rate court judge, and the SNA case will continue to proceed in federal court. Following the BMI rate court decision, 18 members of Congress wrote to Attorney General Loretta Lynch urging her to overturn DOJ’s ruling on the 100 percent licensing determination.
Clearly, deciding upon royalties based on 75 year-old consent decrees severely restricts the ability of songwriters to negotiate a fair price for their work. The government does not regulate other intellectual property rights in such a restrictive and outdated manner.
Congress should continue to review the Copyright Act and consider how to provide equity to the songwriting community. It is high time these artists and composers are able to receive their fair share for their critical role in the creative process; for without writers, there would be no songs.
