Bell Nunnally attorney Danica L. Mathes published the Law360 article “Music Licensing Reform May Be On The Way.” The piece explores comments emanating from the U.S. Copyright Office study of the effectiveness of the current methods for licensing musical works and sound recordings. The comment period concluded September 12.
Mathes notes that this review is driven in large part by the many new ways music is now consumed thanks to today’s technologies – content channels that did not exist when the original Copyright Act was chaptered in 1976, such as apps, videogames and streaming radio. She adds that complexity abounds with music rights ownership, with licensing often entailing obtaining multiple licenses from multiple sources.
Comments issued included suggestions that Section 115, addressing mechanical rights, including the right to make and distribute phonorecords of musical compositions for the reproduction and distribution of musical compositions, should be eliminated or substantially revised to reflect the digital realities of the marketplace. Comments included proposals urging the phase out of the Section 115 compulsory statutory license in order to enable owners to negotiate licenses directly with users at market rates, similar to how sync licenses are negotiated.
Mathes adds that record labels have suggested that Section 115 be eliminated and replaced with an industry wide revenue-sharing arrangement collectively negotiated between music publishers and sound recording owners, which would allow licenses for musical compositions and sounds recordings — which are currently issued separately — to be bundled with license fees to be split according to the terms of an industry-wide agreement.
An additional pressing concern for the music industry, and an area of possible reform, are public performance rights. Songwriters affiliate with Performance Rights Organizations (PROs) such as the American Society of Composers, Authors and Publishers (ASCAP) which issue public performance licenses and collect royalties on their behalf. The PROs also monitor use of musical works by the licensees and distribute royalties to their songwriter and publisher members. At issue, some publishers have led litigation efforts to withdraw digital licensing rights from PROs, so as to negotiate public performance licenses directly with digital music services. However, to date, federal courts have not allowed publishers to remove only “new media” rights from PROs, finding that they must choose for their catalogue to be either “all in” or “all out.”
Also found within the comments is a debate regarding whether copyright protection should be extended to pre-1972 sound recordings. Both the Copyright Office and sound recording owners are in favor of such an extension of protection.
Rates and terms for non-interactive public performances such as Internet radio and services such as Music Choice and Muzak are a topic of discussion as well, especially given that the public performance right for sound recordings does not apply to broadcast radio. Part-and-parcel to Internet and satellite music services are artist concerns regarding transparency of data involving usage, payment and distribution of works.
Mathes concludes by commenting that the sheer pace of technological innovation has made this review of the Copyright Act long overdue.
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