Broadcast Music, Inc. ("BMI") is a music performing rights licensing organization ("PRO") that represents approximately 350,000 affiliated songwriters, composers and publishers, in licensing the public performing right in approximately 4.5 million musical works, including many thousands of foreign works through BMI's affiliations with over 60 foreign PROs. BMI has been a proponent of strong copyright protection for the rights of authors and creators for decades. BMI believes that copyright must be protected on the Internet in order to foster the creation of music. To this end, BMI participated in the negotiations that led to the U.S. signing of the WIPO Copyright Treaty and the subsequent enactment of the Digital Millennium Copyright Act of 1998. These laws adopted new technological protections for copyrighted works online and clarified the copyright responsibilities of Internet service providers in order to make a more stable environment for the commercial delivery of music and other copyright content in the online world.
BMI has been a pioneer in licensing copyrights on the Internet and in digital transmission technologies. In April 1995 BMI announced the first commercial copyright license for music on the Internet, a blanket public performing right license with On Ramp, Inc. Since that time, BMI has entered into license agreements with over 1,000 web sites, including such well known sites as Yahoo!broadcast.com, NetRadio, Spinner.com, MP3.com, Emusic.com, GetMusic.com and FarmClub.com. Since the beginning BMI's Internet license has covered the public performing right involved in both the downloading of music files as well as the streaming of music either on demand or as part of archived or regularly scheduled programming. BMI's licensing experience has proven that licensing is an effective solution to the problem of protecting creators' and copyright owners' rights and ensuring copyright owners obtain commercial reward for the widespread exploitation of their works by online music users.
BMI has embraced new digital technologies that facilitate the licensing of online transmissions of musical works. Last year BMI announced a new "Digital Licensing Center" that allows users to obtain BMI licenses through a simple click-through system available on BMI's award-winning web site, BMI.com. These efforts will make licensing particularly accessible and easy for small webcasters. BMI is also utilizing digital technologies to enable its licensees to submit reports and statements online, permitting faster processing of information that will permit a dramatic increase in the speed of payment of royalties to writers and publishers.
One of the most compelling aspects of the Internet is its international scope. BMI has responded to the challenges posed by the dimensionless nature of cyberspace by negotiating pioneering global rights agreements with over 20 foreign PROs, including the major European societies. As a result of these agreements, BMI now can offer users seamless licenses that cover transmissions of BMI's repertoire of works that cross national boundaries.
Peer-to-peer file sharing services like Napster are only the latest in a long line of challenges presented to the music industry and the copyright community by the Internet. BMI is pleased that the courts have recognized that unauthorized peer-to-peer file sharing constitutes copyright infringement. Unregulated by law, the Internet has the potential to become the largest "swap meet" for piracy of copyrighted works in history. Napster has announced its intention to reformulate its service as a licensed subscription music transmission service. BMI has been engaged in good faith negotiations with Napster over the terms of a BMI blanket license for peer-to-peer file sharing.
BMI has a long history of licensing both free over the air broadcast and subscription cable music transmission services. For example, BMI has successfully concluded industry-wide negotiations with the television industry for promotional use web site licenses for hundreds of television broadcast stations, and with the radio industry for interim licenses for radio signal streaming online. In BMI's view Napster's service shares numerous characteristics of broadcasting and cable transmissions, and if peer-to-peer music transmissions online are allowed to be "free" on the basis of a misguided notion of "fair use", in the long run established markets for public performance of music will be jeopardized. BMI is hopeful that its negotiations with Napster will bear fruit, and does not believe that a compulsory license for the public performance of copyright musical works is necessary or appropriate.
Peer-to-peer transmissions of music involve a number of different copyright rights for which Napster must seek licensing. For example, in addition to the public performing right in the musical work, such transmissions also involve the public performance right in pre-recorded sound recordings that contain those musical works. The reproduction and distribution rights in Section 106(1) and (3) in copyrighted musical works and sound recordings (so-called "mechanical rights") are also implicated by transmissions that result in copies, as the Ninth Circuit found. The recording industry has taken steps to license necessary rights to webcasters, generally, and the music publishers have as well with respect to mechanical rights.
It takes time for licensing practices to be developed. This is especially so in an environment where the business models are changing as often as the technology improves. The Berne Convention requires that copyright owners be given adequate time to develop mechanisms for licensing before exemptions or compulsory licenses are legislated, particularly where substantial vested commercial interests are at stake. BMI supports the Committee's interest in the oversight of the e-commerce in copyrighted works, and believes that the proper approach is to allow the market place to work under the auspices of the DMCA to foster a wealth of entertainment product for consumers in the 21st century.