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Music Groups Urge D.C. Lawmakers to Revamp Licensing Laws

Characterizing the current system as outdated as the heyday of vinyl records and 8-track tapes, representatives for musicians and music publishers called on Congress to overhaul laws governing how songwriters and others in the industry are compensated when their works are licensed.

The hearing on Tuesday before the House Subcommittee on Courts, Intellectual Property and the Internet highlighted the patchwork of regulations and compulsory licensing that the industry says has made it more and more difficult for songwriters to earn a living in the digital age.

“An American profession is in a lot of trouble. We are hurting,” said Lee Thomas Miller, songwriter and president of the Nashville Songwriters Assn. International.

Neil Portnow, president and CEO of the Recording Academy, called for a “music omnibus bill” that would cover “fair market pay, for all music creators, across all platforms.”

There are signs of movement on some of the issues.

Last week, the Department of Justice announced that it was reviewing 73-year-old consent decrees that dictate how music rights organizations ASCAP and BMI set rates for licensing songs. The decree was entered into in 1941 after the DOJ filed antitrust cases against the organizations. Michael O’Neill, the CEO of BMI, argued that songwriters and publishers should have the ability to make more of their own private agreements on the free market.

Meanwhile, legislation has been introduced in Congress to address what songwriters say are inequities in the system.

The Songwriter Equity Act, introduced last month, would change the way that the Copyright Royalty Board calculates how much songwriters are paid for song sales, tying it to “fair market” rates. The rate is now 9.1 cents per song sale. That is up from 2 cents — in 1909.

The RESPECT Act would  require digital services like Pandora and SiriusXM to pay artists and labels when they play recordings made before 1972. That is the year when sound recordings were placed under federal copyright.

And some lawmakers again are calling for a change in the law to require that broadcast radio stations pay artists when their songs are played over the air.

Broadcasters and streaming services oppose many provisions of the proposed legislation. Lee Knife, executive director of the Digital Music Assn., warned that a big problem is that the system was too opaque and inefficient. Streaming services “are paying hundreds of millions of dollars in royalties yet we still hear complaints that songwriters are not being compensated appropriately,” he said.

Others argued that the licensing business is still prone to abuse.

“It doesn’t take much of copyright aggregation to be in a monopoly position,” said Will Hoyt, executive director of the TV Music Licensing Committee.

Whether the legislation gets anywhere this year is another question, in a Congress where the best bet seems to be on nothing much getting done.  That may be even more the case with the midterms in the coming months, and after the stunning upset on Tuesday of House Majority Leader Eric Cantor (R-Va.) to a Tea Party-backed challenger.

Those urging action put it into the context of Congress taking steps to put more of the negotiations over music rights into the free market, and away from government regulation.

At the hearing, there also was a call for some kind of streamlined process for determining just who owns the rights to a song, an often complicated process that has left much music dormant.

“The best way to build transparency is to put us in a free market, because then you would have an incentive, if you want to license your copyright, for it to be known,” said David Israelite, president and CEO of the National Music Publishers Assn.

The House Judiciary Committee has scheduled another hearing on music licensing on June 25.

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