The move follows a push from the American Society of
Composers, Authors and Publishers (ASCAP) and Broadcast Music
Inc (BMI), which license about 90 percent of music heard on
online services, in movies, televisions and restaurants.
ASCAP represents artists including Beyonce, Billy Joel, Katy
Perry and Hans Zimmer while BMI is home to Lady Gaga, Willie
Nelson, Carlos Santana, Rihanna and others.
Songwriters use music publishers to promote their works, and to
do certain licensing tasks - for example, the licensing of
"mechanical" rights, for the sale and distribution of
Publishers and songwriters typically use BMI and ASCAP, both
not-for-profit entities, to collectively license works for
public performance to major music users like Pandora Media Inc,
the Internet radio service.
Currently, any dispute over the cost of a license goes to "rate
courts," which are based in the U.S. District Court for the
Southern District of New York.
And publishers must have an all-or-nothing relationship with BMI
or ASCAP - they cannot use the services for performance licenses
to some clients but not others, for example.
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The rate courts were established by 1941 consent decrees between
ASCAP and BMI and the Justice Department which at the time were not
given an expiration date. Generally, consent decrees expire after
five or seven years.
In the long run, BMI and ASCAP would like to see the slow, expensive
rate courts replaced by arbitration. And they would like to see
publishers given more flexibility in contracting with BMI and ASCAP
to negotiate on their behalf with some music users but not all,
ending the "all-or-nothing" relationship, according to executives
with both organizations.
The Justice Department said in a statement that it was interested in
receiving comments on both the question of arbitration and whether
to keep the "all or nothing" relationship.
ASCAP distributed $851.2 million to its 500,000 members in 2013. BMI
has 600,000 members and distributed $814 million in the 2013 fiscal
(Reporting by Diane Bartz; Editing by Ros Krasny and Eric Walsh)
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