Many fear that ASCAP, the American Society for Composers and Publishers, and BMI, Broadcast Music Inc., were responding to the July 20 legislation entitled "Transparency in Music Licensing Ownership Act," introduced by Sensenbrenner and Rep. Suzan DelBene (D-WA), which calls for the U.S. Copyright Office to establish and maintain a current information database of musical works and sound recordings. The act would also limit the remedies available to copyright owners to bring infringement actions for copyright violations, if they don’t support the database with their information.
Though the ASCAP-BMI announcement might have been a way to stave off such government intervention, some industry executives say that their initial partial solution actually plays into the hands of Sensenbrenner for several reasons. For one, the proposed database will only include performing rights groups’ shares, not each publisher’s share of each song. So it won’t help digital services that offer on-demand streaming get the critical information they need for mechanical licensing. (Digital music services need licenses for both performance and mechanical rights to the tunes they offer.) Some find little solace in the passage in the joint press release announcing the database as something that "will serve as a foundation that can evolve to include a broader range of music information across the entire industry."
The industry needs to be the ones "to create and control a comprehensive rights owners database instead of letting the government take control of this issue," says one senior music publishing executive. "With their announcement of only preparing a half a pie, they are playing to Sensenbrenner, who wants the U.S. Copyright Office to build and control the database."
Sure enough, later that day Sensenbrenner attacked the ASCAP/BMI announcement: If BMI and ASCAP were serious about establishing a music database that they were working on for over a year, "not only would they have spoken to my office and other interested Members of Congress about their plans, but they would have also included their fellow PROs in the initiative. With their announcement today, they are grasping at straws; trying to maintain power over a failing process that only serves their interests, not those of the American consumer."
But sources say ASCAP and BMI have made the Dept. Of Justice, which oversees the consent decrees that they operate under, aware of their database efforts.
The MIC Coalition, a group of trade associations whose members license music, said in a statement that the BMI/ASCAP proposal misses the mark.
"We appreciate that ASCAP and BMI recognize that there is a problem in the current music licensing system, but what they are proposing is not a complete solution," the statement said. "Only Congress has the ability to create a neutral, reliable and comprehensive database. That’s why the MIC Coalition strongly supports "Transparency in Music Licensing and Ownership Act" introduced by Congressman Sensenbrenner (R-WI) and Suzan DelBene (D-WA)."
Even Sony/ATV chairman Martin Bandier questioned the wisdom of making the announcement without having the other two PROs, SESAC and Global Music Rights, on board.
"While I’m not surprised about ASCAP and BMI teaming up to launch a database, I am disappointed that it wasn’t inclusive of other performance rights organizations," Bandier said. He notes that their effort doesn’t solve the transparency issue.
Yet others endorsed the move by ASCAP and BMI. Rep. Doug Collins (R-GA) issued the following statement in response: "Today’s announcement from ASCAP and BMI is a substantive step forward in helping modernize the music industry. ASCAP and BMI are working together to better serve songwriters, publishers, licensees, and the entire music community through a free-market solution that leverages industry expertise and efficiencies. ASCAP and BMI represent 90% of American songs and have built this database with the potential to include an even broader range of information across the music industry.
Likewise, the "NAB welcomes the announcement by ASCAP and BMI for plans for a joint ownership database. This database could be a first step in bringing greater transparency to music licensing, and we look forward to continuing to work with any stakeholder committed to a comprehensive solution to this problem."
SESAC declined comment, but Global Music Rights issued a statement saying it looks forward to joining BMI and ASCAP in creating an industry-wide database. "No database would get off the ground without BMI and ASCAP, but no database would be complete without our works and those of SESAC," GMR CEO Randy Grimmett said in a statement. "I am confident based on my ongoing dialogue with BMI CEO, Mike O’Neill, that through our joint efforts and leadership, this database will be an industry driven solution mitigating any need for further encroachment into the music publishing industry by the government."
Multiple sources said SESAC and GMR heard about the ASCAP-BMI database for the first time on the day it was announced. If they want to address transparency, maybe they should have a better communication strategy, says one industry source. "They say they are open to bring in other partners, but the tactical error here is announcing a partial solution when the answer needs to be a comprehensive solution that the proposed legislation is trying to address," that source says.
ASCAP and BMI "would love to work with other organizations as well as other PROs to expand the database and make it a viable solution to everybody," BMI president Michael O’Neill told Billboard. "We are keeping it focused on the two biggest song databases in the world first and then we will try and expand it to other places. If you try to do it all on day one, it will fail. If anybody thinks this is easy I would love to talk to him A lot of people can sit on sidelines and throw stones, but we are paying out billions of dollars by processing trillions of transaction and we have the software that can handle it."