by Kevin Erickson, Communications Associate & Jordan Reth, Policy Fellow

You may remember back in March 2013, when Register of Copyrights Maria Pallante—our nation’s highest ranking copyright official—told the House Judiciary Subcomittee on Courts, Intellectual Property and the Internet, “Music licensing is so complicated and broken that if we get that right, we can get the whole [copyright] statute right.”

Well, after more than a year of hearings examining the nation’s copyright laws from many different angles, that same subcommittee finally tackled music licensing directly on June 10. It was a wide-ranging discussion, touching on multiple pieces of legislation currently under consideration, offering a preview of legislation around the corner, and laying out a range of views of how music licensing ought to be structured.

Witnesses included Jim Griffin of OneHouse LLC, Will Hoyt of the TV Music License Committee, David Israelite representing the National Music Publishers Association, Lee Knife of the Digital Media Association (representing online music businesses like Apple, Amazon, and YouTube), country music songwriter Lee Thomas Miller, Michael O’Neill of performance rights organization BMI, and Neil Portnow of the Recording Academy. 

Rep. Darrell Issa (R-CA) humorously observed of the panel “each of you has a vested interest in some aspect of the status quo and each of you is railing against some part of the status quo.” Seems legit.

Portnow of the Recording Academy noted his support of three proposed bills: the Songwriter Equity Act (which would modify how royalty rates are determined for songwriters), The Protecting The Rights Of Musicians Act (which would compel certain AM/FM broadcasters to compensate performers and sound recording owners), and The RESPECT ACT (which would compel internet radio services and satellite radio to pay performers and sound recording owners for pre-1972 works). Portnoy also called for an “omnibus bill” that would offer a more comprehensive approach to music licensing reform and ensure “fair market pay for all music creators across all platforms.” (Indeed, Rep. Jerrold Nadler (D-NY) indicated that he intended to introduce such a package in the near future.)

Lee Thomas Miller, writer of hits for artists like Tim McGraw, emphasised the central role songwriters play, saying “What I make is the seed that fuels the entire music business” and described the increased pressure on his professional songwriter peers in Nashville. His proposed solution was fairly radical: eliminate compulsory licenses and consent decrees governing ASCAP & BMI. David Israelite of NMPA similarly was critical of compulsories, and warned against their expansion, and characterized the consent decrees as outdated, as did Bill O’Neill of BMI.

It’s easy to feel sympathetic to Miller’s account of the plight of professional songwriters, and we applaud him for making his voice heard so eloquently. At the same time, you can share concerns about low rates afforded to songwriters on digital services while also thinking that compulsories and consent decrees can have some clear benefits—and that eliminating them could have serious unintended consequences. In our own written testimony, we raised concerns about “the ever-present possibility that the biggest music publishers will withdraw all catalog from the PROs, leaving just the smaller publishers and non-commercial broadcasters covered by the blanket licenses offered by the two PROs operating under consent decrees,” amounting to “a further fracturing of the licensing marketplace to the competitive disadvantage of independent publishers, songwriters and smaller broadcasters.”

For his part, Lee Knife of DiMA touted digital services’ role in growing new revenue streams for musicians and argued that compulsory licensing was vital to this dynamic. Knife opposed the RESPECT Act—his written testimony called it a “tangential legislative joyride”—but when pressed on the reasoning by Rep. Hakeem Jeffries (D-NY), he declined to argue that performers didn’t deserve that money and that services shouldn’t have to pay for pre-1972 uses, instead stating that the bill was “an anomaly built on top of an anomaly,” and that full federalization of sound recordings was a more substantive solution, as it could give pre-1972 creators the full suite of rights while preserving the usual exemptions for libraries and archives, as well as fair use. (Here, at least, we’re inclined to agree.)

Jim Griffin focused his testimony on the need for a centralized registry/database of copyrighted works tied to global unique identifiers to better facilitate licensing and make it easier for creators to get paid. He noted that the lack of such a database means that unattributable incomes are being divvied up by market share, rather than reaching the creators. He further suggested that a market-based solution was possible to achieve without the government having to make huge investments of money and resources.

Rep. Jeffries asked a potent question about who could potentially abuse the system in a “free market approach.” Lee Knife pointed to recent rate court decisions, and argued that direct deals (or government-backed emulations) would create inefficiencies. He pointed to film and television licensing as an example—both the composition and sound recording rights must be negotiated with all rightsholders, which he contended is a slow and laborious process.

David Israelite of NMPA took a different view, pointing to YouTube, which is, by Israelite’s account, “completely licensed.” In fact, as Jim Griffin pointed out, YouTube is only “completely licensed” on the composition side as far as NMPA members are concerned—and not all songwriters are thrilled with the terms of that deal or the way monies are allocated. Griffin reiterated that, in the absence of a comprehensive database associating songs with the various rightsholders, there’s an abundance of music on YouTube for which the service has difficulty paying.

There was plenty of talk about getting songwriters a “fair market value” for their work, but in the hearing’s final moments, Rep. Thomas Marino (R-PA) asked the witnesses to respond in writing to better describe the difference between a “fair market” and a “free market.” Indeed, this may be the crucial question for independent musicians and songwriters. With so much consolidation among major record labels, music publishers, AM/FM broadcasters and telecommunications companies, strictly free market approaches might work well for the most powerful players but disadvantage independents. At the very least, direct deals rarely achieve the kind of transparency and “fairness” that we’d like to see.

Congress’s next hearing on music licensing happens on June 25—witnesses will include Darius Van Armen of indie label Jagjaguwar and singer/songwriter Roseanne Cash, among others.  As always, we’ll be covering it live on Twitter.