November 28, 2012
Songwriters’ Groups Speak Out on Rate Setting: ASCAP, BMI, SESAC and the NSAI File Joint Letter to Congress on Music Licensing Reform
In advance of a House Intellectual Property Subcommittee hearing on music licensing reform being held today, ASCAP, BMI, SESAC and the NSAI are calling on Congress to address the concerns of songwriters and composers, whom the groups say are being disadvantaged by a misaligned regulatory structure, resulting in artificially low payments to America’s music creators. In a joint letter to Committee Chairman Bob Goodlatte and Ranking Member Mel Watt, the groups laid out their reasons for opposing the so-called “Internet Radio Fairness Act of 2012,” H.R. 6480 (“IRFA”), commonly known as the Pandora bill, while noting that any effort to reform music licensing should address a greater problem: the current disjointed rate setting systems governing digital services. This results in anundervaluation of the public performing right in musical works, harming America’s songwriters, composers and music publishers.
As stated in the letter, “This undervaluation of the public performing right runs contrary to global practices which often yield two times the fees generated by US license rates or more, when compared to equivalent economies, and represents a trend that is harmful to both America’s music creators and the larger economy. Any Congressional examination of online music licensing issues needs to address this serious, broader issue to ensure that the interests of writers and publishers – the very creative foundation fueling the music industry – are not further deteriorated.”
The letter points to the gross inequities that have developed in the music licensing landscape as a result of opposing rate setting systems applied to the amounts paid to songwriters, composers and publishers versus those paid to record labels and recording artists.
To illustrate this point, the letter notes: “Pandora’s 2012 annual report stated that it paid 49.7% of its revenue in royalties to SoundExchange, and 4.1% of its revenue in royalties to the US PROs, namely, ASCAP, SESAC, and BMI. In other words, from the total pool of monies paid for the performance of music and sound recordings, almost 92% of the money paid by internet radio flows to record labels and performing artists through SoundExchange, and only 8% of it is paid to songwriters and publishers…This almost 12-to-1 disparity in SoundExchange and PRO payments is unprecedented in the global music marketplace. Around the world, the opposite occurs; the public performing right in the underlying music composition is paid at far higher rates than the public performance right in the sound recording. In fact, the latter right is sometimes referred to as a “neighboring right,” in recognition that rewarding the creators of the musical work—when it is publicly performed—is a central tenet; without the creation of the underlying musical work, there would be nothing to record.”
The American Society of Composers, Authors and Publishers (ASCAP) is a professional membership organization of songwriters, composers and music publishers of every kind of music. ASCAP’s mission is to license and promote the music of its members and foreign affiliates, obtain fair compensation for the public performance of their works and to distribute the royalties that it collects based upon those performances. ASCAP members write the world’s best-loved music and ASCAP has pioneered the efficient licensing of that music to hundreds of thousands of enterprises who use it to add value to their business – from bars, restaurants and retail, to radio, TV and cable, to Internet, mobile services and more. The ASCAP license offers an efficient solution for businesses to legally perform ASCAP music while respecting the right of songwriters and composers to be paid fairly. With 450,000 members representing more than 8.5 million copyrighted works, ASCAP is the worldwide leader in performance royalties, service and advocacy for songwriters and composers, and the only American performing rights organization (PRO) owned and governed by its writer and publisher members. www.ascap.com
Broadcast Music, Inc.® (BMI®), a global leader in music rights management, is an American performing rights organization which represents more than 550,000 songwriters, composers and music publishers in all genres of music and more than 7.5 million musical works. BMI values music for the creative and business communities alike. Upon its founding in 1939, the company created a groundbreaking open-door policy becoming the only performing rights organization to welcome and represent blues, jazz, country, and American roots music. Today, the musical compositions in BMI’s repertoire represent the most popular hits and soundtracks across all genres of music, licensed by more than 600,000 businesses. The company distributes the fees it generates as royalties to BMI’s music creators and copyright owners. Find out more at www.bmi.com, follow @BMI on Twitter and stay connected through Facebook.
SESAC is a performing rights organization with headquarters in Nashville and offices in New York, Los Angeles, Atlanta, Miami and London. Founded in 1930, is the second oldest and fastest growing of the nation’s performing rights companies. SESAC represents songwriters and publishers and their right to be compensated for having their music performed in public. SESAC represents songwriters/artists such as Bob Dylan, Neil Diamond, RUSH, Mumford & Sons, Lady Antebellum, Swizz Beatz, Alice In Chains, MGMT, The Avett Brothers, Bryan-Michael Cox, Natalie Grant, Nate “Danja” Hills and Mates Of State as well as many others.
The Nashville Songwriters Association International (NSAI) is the world’s largest not-for-profit songwriters trade association. NSAI is dedicated to protecting the rights of and serving both professional and aspiring songwriters in all genres of music. . Established in 1967, NSAI has more than 5,000 members and 145 chapters spanning the United States and six other countries. NSAI also governs the California Songwriters Association and the Texas Songwriters Association.
Jennifer Purdon Turnbow