July 2005
Dear Songwriter & Composer:
On June 27, the U.S. Supreme Court handed down a unanimous decision in the precedent-setting Grokster case, ruling against companies whose software facilitates illegal peer-to-peer file sharing. The Court has made clear in its decision that services whose clear intent is to foster infringement are liable for the illegal behavior of third parties using their software.
BMI has been at the forefront of licensing music for digital transmission, and this ruling will strengthen the environment for legitimate online music businesses. This victory is shared by the music community, innovative licensed music businesses, and consumers alike. A detailed review of the Grokster legal case is available on bmi.com.
The emergence of a viable business in the digital distribution of music over the past several years has focused the attention of the industry and members of Congress on difficult issues having to do with licensing of the mechanical right when music is digitally delivered. Digital music services have complained that the current compulsory license for mechanical rights codified in Section 115 of the Copyright Act is cumbersome and requires reform. In an attempt to develop a legislative solution, the House Subcommittee on Courts, the Internet and Intellectual Property initiated a series of hearings and meetings focusing on marketplace solutions and the possible reform of Section 115.
While the issue of mechanical licenses has not historically impacted BMI, the digital transmission of music often involves both the mechanical and public performing right. Consequently, BMI has attempted to meet our licensees’ needs to provide licensing solutions where both rights are required. We have actively represented the interests of our songwriters, composers and music publishers in the marketplace as well as in Washington, DC, working to protect the performing right, which is vital to songwriters’ and publishers’ livelihoods. We have fought against legislative and regulatory efforts that would unfairly eliminate or revise the public performing right as it applies to digital transmissions.
Under the leadership of Lamar Smith, the Subcommittee’s Chairman, BMI has been party to industry-wide discussions that have resulted in the creation of various proposals to address the issues with mechanical licensing. We look forward to continuing discussions in this area with all involved parties. As we work with Congress, The Register of Copyrights, and our partners in the music industry, our primary objective will be to safeguard the full value of our affiliated songwriters’ and publishers’ copyrights and help create an efficient and fair licensing system for digital music services. We will continue to keep you informed of new developments in this area.
BMI has been working in the digital world for more than a decade to build a market for the performance of your music. We recognized the potential for licensing digital transmission before Internet streaming was a reality and, in calendar year 2004 alone, tracked more than 2.4 billion performances of music in the digital media.
Digital technologies have also allowed us to serve your needs more rapidly and efficiently than ever before. I’d like to remind you that songwriters, composers and individually owned publishers can now update their contact information through bmi.com. Using this feature, part of the array of digital tools BMI offers its affiliates, is quick and easy and insures your statements will reach you in a timely manner. To get started, visit the online services area of bmi.com
Please note that, in addition to regularly scheduled royalty payments, this distribution includes retroactive Muzak license fees for the July 1, 2004 - September 30, 2004 performance period. As we have previously noted, our recent agreement with Muzak significantly increases the fees BMI receives from the background music service.
As the developments outlined above illustrate, BMI is dedicated to protecting the value of your copyrights in every form. From time to time I may ask you to help us, and yourselves, with calls to action in the preservation of copyright and other issues that affect each and every one of us. I hope you will continue to rely on these letters as a valuable communication tool for our entire community.
Sincerely,
Del Bryant
President
Chief Executive Officer