In a recent op-ed in the Washington Times, columnist Dean Chambers takes performance rights organizations, including BMI, to task for allegedly attempting to “skirt antitrust protections” in seeking to modify their consent decrees. Chambers suggests that the purpose of such decree modifications is to manipulate the market and reap even higher fees from music users on top of an already “all-time high” year of royalty distributions. Beyond this conflated characterization, Chambers misrepresents BMI’s proposal to the United States Department of Justice to modify our consent decree, suggesting that once freed from this agreement, BMI would, in effect, wield monopoly power and “drive up costs on businesses across the spectrum.” Respectfully, this assertion betrays a broad and fundamental misunderstanding of BMI’s initiative to reform our decree, and we’d like to take this opportunity to illuminate the specifics of the proposal.
BMI’s consent decree, originally penned in 1966, is simply outdated and in need of comprehensive reform. Among other things, it does not take into account the technological advances that have transformed the predominant way listeners consume music today, including via streaming music services, and the business needs of music creators and music users alike.
In an ongoing dialogue with the U.S. Department of Justice, BMI asks for three key modifications:
- Digital rights withdrawal would give publishers as well as music users the flexibility to negotiate their own free-market digital deals, while continuing to allow BMI the right to license publishers’ work for traditional music uses.
- Bundling rights would allow BMI to license the additional music rights a user would need to deliver its product or service to the public. This would enable BMI to act as an efficient “one-stop” licensing source to meet the needs and match the pace of the expanding digital marketplace. No publisher would be required to grant BMI additional rights; no music user would be required to license additional rights from BMI; and the rates for mechanical rights, for example, would be set by statute, not BMI.
- Finally, BMI would like to see the rate-setting forum moved from the federal court to a binding arbitration model. Music users would be assured of a rate-setting mechanism to resolve disputes with a full slate of fact and expert discovery, but one that’s quicker, less complicated, more attuned to market imperatives and significantly less expensive for all parties concerned.
Nothing we’re proposing would increase our purported market power; in fact, in the case of digital rights withdrawal, our market power, by definition, would be reduced. The goal of our proposal, rather, is to meet market needs and remove anticompetitive restrictions that no longer serve a sound purpose.
Regarding allegations of anti-competitive behavior, it’s worth noting that BMI has never been in violation of either our consent decree or antitrust laws throughout our 75-year history.
By implementing these consent decree modifications, the Department of Justice would simply be ensuring that the BMI consent decree is more efficient, more flexible and better serves users in the modern music landscape.
Rosen is the senior vice president and general counsel of BMI, overseeing global operations of the legal department, directing the organization’s legal affairs, as well as all attorneys working within the company.