The House Judiciary Committee sent a letter to the Copyright Registry, Shira Perlmutterrequesting consideration of “concerns” and “emerging issues” related to performing rights organizations (PROs).
In the letter, signed by committee chairs Rep. Jim Jordan and Rep. Darrell Issa as well as a member of Rep. Scott Fitzgeraldtwo specific areas of concern are addressed: the “proliferation” of new PROs and the lack of transparency regarding the distribution of general licensing revenue.
The letter, received from bulletin board, notes that the latter issue is of particular importance to independent artists and smaller publishers. “It is difficult to assess how efficiently PROs distribute general license revenue based on publicly available data,” the letter states. “For example, it is difficult to determine how lesser-known and independent artists as well as smaller publishers are compensated compared to widely popular artists and major publishers.”
Concerns about transparency in PROs are not new. The National Music Publishers' Association, the trade organization that represents music publishers, has spoken publicly about it, as have several individual songwriters and publishers over the years. Those concerns grew last year after BMI, one of the largest PROs in the country, changed its business model from nonprofit to for-profit and was acquired by private equity firm New Mountain Capital.
At the end of the BMI fiscal year 2022, Bulletin board reported that “for the first time, it contains almost no financial information”.
“I think you have a fundamental right to know how much it's costing you to use a particular collection company now, I will tell you that ASCAP gives you a very close look at how much it costs not exactly but they give you a very close approximation. ,” said the CEO and president of the NMPA David the Israelite at the Association of Independent Music Publishers Meeting in February. “BMI at the end of the last financial year we did not receive this information.”
The letter states that “request[s] for the Office to consider how various PROs currently collect information from live music venues, music services and other general licensees about public performances; the level of information currently provided by PROs to the public; whether there are any gaps or discrepancies in the distribution of rights; what technological and business practices exist or could be developed to improve the current system; the extent to which current distribution practices are the result of existing legal and regulatory constraints; and possible recommendations for policy makers.'
The “proliferation” of PROs is a newer concern. Around the world, most countries usually have a PRO for local authors and publishers to participate. In the US, it works differently. For over a hundred years, ASCAP and BMI have been the primary choices for a songwriter or publisher looking to collect performance royalties in the United States, but there's also the option of going with SESAC, a smaller but still major player in the US. PRO landscape, which has been around for almost as long.
Since its inception in 2013, Global Music Rights (GMR), a for-profit PRO founded by industry veteran Irving Azoffhas become heavy in space as well. GMR's business model is to focus on a smaller roster of only the top tier songwriters and then charge a premium to the bars, venues, stores and theaters that wanted to play them. Because their roster includes important artists among them Bruce Springsteen, Billie Eilish, Drakeand more, the GMR general license became immediately important to licensees, regardless of cost.
In 2017, a fifth US-based PRO emerged. AllTrack was founded by a media investor and former SESAC board member Hayden Bauer and is designed to focus on independent creators with a technological approach. This year, AllTrack became the fourth US PRO to be accepted by the International Confederation of Societies of Writers and Composers (CISAC), joining ASCAP, BMI and SESAC.
“Permissions [like bars, restaurants and small businesses] reported receiving requests for rights from new entities claiming to represent songwriters… Licensees are concerned that the proliferation of PROs represents a continuing risk of infringement claims and potential risk of litigation from new and unknown sources,” the letter states.
“We ask the USCO to consider the increased costs and burdens placed on licensees to pay an ever-increasing number of PROs, factors that may be contributing to the proliferation of new PROs, and recommendations to improve clarity and certainty for licensees” . continues.
Perlmutter and the Copyright Office can't make specific changes to how PROs operate today, but letters like this one are often sent in hopes that they will draw attention to specific issues or form the basis of a hearing or bill .
