Music industry stifled by old law

In three words — "federal consent decree"--an antiquated legal ruling from 1941 is destroying the music business and will continue to have a chilling effect on one of America's most creative and beloved industries.

It really should be called the “non-consent" decree, as many current songwriters like me sure didn’t consent to it. Interestingly, the 73-year-old federal consent decree could be lifted with the stroke of a pen. But it has to be the right pen. As strange as it sounds, now only the U.S. Department of Justice can save the incomes of all songwriters and music publishers by simply abolishing this outdated decree.

Such an action would immediately help BMI and ASCAP by allowing member songwriters and music publishers to be paid for their songs -- and not allow streamers to use songs from the catalogues of BMI and ASCAP for virtually nothing. We have been witnessing virtual piracy at nano-royalties.

Who would have guessed that the livelihoods and music careers of millions of songwriters, music pub- lishers, sound recording owners plus their heirs and assigns are all in the hands of the Department of Justice?

But today, the songwriter and music publisher no longer have control over their own property: the licensees do, and that has to stop. One major lynchpin is removing the 1941 consent decree for good.

As every lawyer knows, a consent decree is just a legal tool that courts use to punish certain companies for past wrongdoings by letting them continue to operate, while forcing them to stop certain criminal behaviors.

So, in this case, just because ASCAP executives were up to no good in 1941, that doesn’t mean streamers and web-casters should be able to steal millions of songs in 2014 at $.00000012 cents per song.

Where is the justice in that? The unintended consequences for songwriters, music publishers, and independent artists has been devastating for them over the past 15 years and into the foreseeable future.

Lately, a great deal of confusion has been created and a series of events has already irrevocably changed the future of music and royalty collection forever.

These historic events have included major publishers leaving BMI and ASCAP the past few years, and as a result, we’ve had two opposing federal rate court rulings — one forcing ASCAP publishers back in, the other forcing BMI publishers back in or all out. As of this January, a majority of major music publishers completely left BMI, though some have recently signed temporary agreements until the end of the year. In addition, most of these majors publishers have negotiated historic direct licensing deals with streamers like Pandora.

Unfortunately, ASCAP and BMI have never tried that hard to abolish the consent decree as it was always convenient to hide behind it. It creates an instant market, letting broadcasters and streamers license the pair's repertoires while forcing writers and members to take below market rates and stay locked in with a windowed two-year automatically renewing agreement.

Moreover, ASCAP continues the outdated practice of “two-week sampling” on traditional radio. It made sense before computers were invented; however, to continue sampling a few hundred reporting stations while tracking or purchasing three months worth of 100 percent computerized song data from Nielsen of around 1700 stations doesn't seem quite right. To BMI’s credit they have stopped the 2 week sample and pay on all performances from approximately 2200 radio stations monitored by Mediabase. For that, BMI should be congratulated.

“It’s a godawful system that just doesn’t work,” Sony/ATV Music Publishing Chairman Martin Bandier has said about streaming rates and the consent decree.    If Sony/ATV or Universal leave BMI, it might be over for BMI. After all, Universal and other majors will probably leave if the consent decree and judges' rulings are not resolved by the end of this year. Even legendary songwriter Burt Bacharach called for drastically reforming the consent decree in a Wall Street Journal editorial a few months ago.

For the sake of an American music industry that has given so much to our shared cultural life, we must find a way to improve the music business for the better--a way that benefits all players.

To their credit, BMI tried to make a start in this direction. Last year, BMI provided me and other major publishers with a Digital Rights Withdrawal (DRW) addendum to our standard publisher's agreement. This move allowed publishers to direct-license their catalogs with streamers and other digital web-casters without interfering with BMI’s collection of terrestrial radio performance royalties plus cable television and other traditional mediums. This agreement had to be signed by September 15, 2013 to take effect, and I did so.

This was a great agreement, and I hope the courts rule that the DRW addendum still stands. I applaud BMI’s current effort to keep the DRW in place and to reform the consent decree in talks with the Justice Department.

For 16 years I’ve been affiliated with BMI as a songwriter and music publisher. I have great friends who still work there, and I regret having to leave.    None of them designed this system; it evolved as distribu- tion and technology evolved.

The outdated and harmful federal consent decree can only force all songwriters and publishing companies to take literally nano-pennies or what some call “below market rates” for so long. All major publishers, as well as this one, have been forced to re-think our affiliation with ASCAP and BMI because of a tiny but devastatingly harmful 73 year old legal decree.

Lift the consent decree, let ASCAP and BMI amend their blanket license for the 21st century, and let those who wish to direct license their catalogs do so. Let songwriters and publishers get back to what they do best: making music.

Johnson is a songwriter, singer and music publisher based in Nashville, Tenn.