Universal Music Publishing Group (UMPG) has entered into a short-term deal for its entire catalog to remain a part of the blanket license offered by BMI to all music users.
Like some other publishers, UMPG had announced it would withdraw digital rights from BMI beginning Jan. 1, 2014. But on Dec. 18, a BMI/Pandora rate court judge ruled that if UMPG followed through and withdrew the digital rights, the PRO would not be able to license its music for any new deals, even licensees like radio, television, concert venues, restaurants and stores.
The deal's length is short-term because many music publishers hope that the Department of Justice will agree to amend the consent decree so that digital rights can be withdrawn. The U.S. publishing sector has already reached out to the DOJ to see if it would respond to requests to amend the decree, which BMG signed back in 1941.
BMI "is regulated by an antiquated consent decree with the Justice Department that was last amended before the introduction of the iPod," UMPG chairman/CEO Zach Horowitz said in a statement. "The decree is ill-suited for the changes in the digital marketplace. A recent court ruling would require us to withdraw our repertoire from BMI for all purposes in order to retain the right to directly negotiate with mobile and online music services. We don't believe that the consent decree should work this way."
Horowitz said that the rapidly evolving digital marketplace has come with many unique business models and approaches, which he says often requires customized arrangements. Moreover, he added that there are few benchmarks for a rate court judge to consider when trying to determine fair market rates for online and mobile music services. Furthermore he argued that direct negotiations between individual publishers and a music service is the best way to establish competitive marketplace rates.
Last week, UMPG announced that it stuck a voluntary deal to license its music to Pandora. While a Pandora response to the deal said the agreement should be viewed as a specific approach to address a short-term issue, because its a voluntary deal, UMPG will be able to remain a part of BMI without falling afoul of the BMI Judge's ruling on publishers being all-in or all-out.
"We hope the Justice Department will revisit the consent decree to encourage these free market negotiations in the digital space, without limiting those areas still well suited to BMI's collective licensing," Horowitz said.
He added that an amended consent decree would protect the livelihoods of UMPG writers and composers, while retaining the benefits to the market that licensing through BMI can achieve.
"BMI brings great efficiencies to the market and plays an important role in licensing the many businesses that use music," Horowitz said. "We'd like to thank BMI for working with us to achieve a flexible arrangement to address these challenges."