A federal judge ruled that BMI can engage in fractional licensing of songs in its catalog, rejecting a Justice Department conclusion that such practices were not allowed under the terms of a 75-year-old consent degree.
U.S. District Court Judge Louis Stanton wrote that the consent decree “neither bars fractional licensing nor requires full-work licensing.”
Last month, the Justice Department announced that it had completed its review of the consent decree over BMi and another major music rights organization, ASCAP, and concluded that “the current system has well served music creators and music users for decades and should remain intact.”
That was a setback for BMI and ASCAP, not only because the Justice Department made no revisions, but that they also mandated a regime of 100% licensing. What that meant is that in the case of a song that has joint ownership, either organization could only represent the work if they had clearance from all of those who had interests. Under fractional licensing, they can grant rights to that part of the work they represent.
Mike O’Neill, the president and CEO of BMI, said that “as we have said from the very beginning, we believed our consent decree allowed for the decades-long practice of fractional licensing and today we are gratified that Judge Stanton confirmed that belief. Our mission has always been to protect the interests of our songwriters, composers and publishers, and we feel we have done just that. Today’s decision is a victory for the entire music community.”
Songwriters and music publishers believe that full-works licensing would drive down the prices for their works at a time when many in the industry are already struggling.
Beth Matthews, the CEO of ASCAP, said, “This is terrific news for all of us in the songwriting community as we continue to work on modernizing the consent decrees to reflect the real world.”
Still, digital music services and broadcasters had pushed the DOJ for full licensing, arguing that it otherwise placed a burden on them. The National Association of Broadcasters argued that by allowing for fractional licensing, stations would have the responsibility to locate and secure licenses from countless other rights owners, “an impossibly expensive and practically infeasible task.”