The Digital Rights Bundle: Real Progress For Copyright Owners?

In April 2005, BMI will mark the 10th anniversary of the music industry's first license for the digital performance of music over the Internet.

Del Bryant is president/CEO of BMI.

In April 2005, BMI will mark the 10th anniversary of the music industry's first license for the digital performance of music over the Internet.

During those 10 years, BMI has collected more than $10 million in license fees for digital media, including a multiplicity of uses on the Internet. We have distributed more than $2 million in royalties for ringtones alone in the past two years, and the growth in this arena is exponential. A new plan to bundle digital rights may have the unintended effect of putting that royalty stream at risk.

BMI, its fellow performing-right organizations and their digital licensing customers have created an orderly marketplace. In fact, a performing-right license is the easiest for music users to obtain. A customer has only to ask BMI or ASCAP for a license and one will be automatically granted, pursuant to our consent decrees.

A wide spectrum of lawmakers and policy experts, from the Cato Institute to the Electronic Frontier Foundation to members of Congress and the U.S. Copyright Office, have endorsed the collective administration of rights and the blanket license as used by the performing-rights organizations as the preferred business model for licensing in the digital age.

Last year, BMI's digital-licensing revenue grew by more than 70%. We have signed marketplace-driven, long-term agreements for more than 3,700 digital-music outlets, including more than 200 ringtone and mobile-entertainment providers. Each quarter, BMI processes hundreds of millions of digital performances and reports Internet and ringtone royalties with transparency to our writers and publishers.

In this fast-growing arena, BMI, a nonprofit entity, has become a paradigm of the trusted broker creating a marketplace with a state-of-the-art management system at a very low administrative cost and with a high level of customer service. Our sister collecting societies in Europe and Asia, where the ringtone market is more developed, have paid hundreds of millions of dollars to songwriters and copyright owners during the past several years.

We understand the challenges of building the market for digital copyrights. While our efforts have focused on establishing an independent value for the performing right, we have also supported our colleagues in music publishing and recorded music as they meet the unique challenge of licensing the mechanical, synchronization and master-recording rights. We applaud efforts to simplify and accelerate the licensing of recordings for master ringtones and ringbacks, provided the rights and income of writers and publishers are not compromised.

A recent guest commentary in this magazine (Billboard, Nov. 27) announcing a new initiative in this regard was silent on the role of the performing right. The initiative, however, raises fundamental questions: If performing rights are included in the licensing plan, how are they valued, and how will the performing-right royalties be accounted for and paid to songwriters and music publishers?

Are we looking at a business model that circumvents such performing-right organizations as BMI and ASCAP? If so, this may not be real progress for songwriters, composers or publishers.

If the performing right is devalued or negated, songwriters and composers who rely on their performing-right royalties may find their income reduced or eliminated in some of the most important future markets for their works. The result would jeopardize the multiple and distinct income streams that have benefited songwriters, composers, music publishers, recording artists and labels alike. Further, it could permanently disrupt what is a viable marketplace for administration and licensing of music copyrights.

The agreement proposed in the Billboard guest commentary-and others recently announced-may not include the bundling of the performing right. But, if it is the intention to license the performing right along with other rights-which is an available option-we would certainly hope that the royalties flowing to songwriters and music publishers for the performing right would at least match what BMI and other performing-right organizations have established during the past several years.

Today, the performing right is alive and well and working to the benefit of songwriters, composers and music publishers in the digital arena. In many cases, it is their economic lifeblood. Let's not tinker with something that is working so well, for so many.


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