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Mike O’Neill: BMI Looks to the Future as DOJ Consent Decree Appeal Deadline Expires (Guest Op-Ed)

Last week brought some definitive good news for BMI, the creative community and the music industry at large, finally closing the chapter on the U.S. Department of Justice (DOJ) and BMI's consent…

Last week brought some definitive good news for BMI, the creative community and the music industry at large, finally closing the chapter on the U.S. Department of Justice (DOJ) and BMI’s consent decree battle. On March 19, the DOJ’s deadline to file an appeal with the U.S. Supreme Court expired. As such, the final ruling of the Court of Appeals for the Second Circuit stands that BMI is free to continue to engage in the historical practice of fractional licensing.

We are incredibly gratified by our victory in this matter, and believe the industry should view it as an overwhelmingly positive outcome as well. To put it in context, the negative ramifications of the DOJ’s 100 percent licensing interpretation were so sweeping that it was important enough for BMI to take the U.S. government to court. We did this even though some said we could have increased our strength as a performing rights organization (PRO) if we had agreed with the DOJ. We did this purely because it was the right thing to do, and the courts agreed with us. Our win means songwriters can keep collaborating with whomever they choose, businesses that use music can continue to license that music in the same manner as they always have, and BMI can focus on protecting and growing the profession of songwriting and modernizing music licensing, which was always our intent. So where do we go from here?


Create better insight and transparency into the licensing process

While our victory ensures that BMI can continue to do business as usual, that victory does not alter the fact that there are new entrants in the PRO space, which may complicate matters for businesses that use music. Going forward, might these businesses need to secure a fourth license, or perhaps a fifth, from additional PROs? Yes, they might, but that’s an individual call that businesses will have to make, weighing the cost of each available license against the freedom and flexibility to play whatever music their listeners are expecting, a freedom that comes with obtaining all necessary licenses. To address this, BMI recognized a powerful need for greater data transparency to help businesses make informed decisions regarding their music needs. That’s why we chose to partner with our largest competitor, ASCAP, on a comprehensive joint database of musical works, which will be a single resource of song-ownership information. The intention is for this to be a vital asset to assist radio stations and other businesses in assessing their music needs, while providing greater insight and transparency into the licensing process.

Evaluate the potential of licensing beyond the performing right

To further those efficiencies, BMI is also evaluating the option of licensing beyond the performing right. We have long believed our consent decree allows for the licensing of multiple rights, which is why four years ago we asked the DOJ to amend our decree to clarify that ability, among other much-needed updates. Thanks to our recent victory over the DOJ, we now have definitive confirmation. The Court of Appeals for the Second Circuit ruled that if the language of our consent decree does not expressly prohibit a business activity, in this case fractional licensing, then it is permitted under the decree. That opens up opportunities for us to better serve the needs of our affiliates, and we are exploring what it would look like for music users, creators and copyright owners if BMI licensed or administered multiple rights. 


Reform the laws governing music licensing to reflect the transformative impact of technology

At the root of this revolution is technology, transforming the way music is created, discovered and experienced. While your favorite song 10 years ago may have been created by one or two songwriters face-to-face in a writing room, and you found it and loved it by listening to the radio, today your favorite song may have 10 co-writers located in different cities who used digital platforms to connect and create, and you discovered it when curating your streaming playlist.

This is why legislation that supports creators and the current way they write music is imperative. Our laws need to reflect the end-to-end impact of technology on our business, from music creation to music delivery, and of course, must ensure that songwriters are paid more than fractions of pennies for their streams. This is why BMI is highly engaged on Capitol Hill to ensure the rights and royalties of creators and copyright owners are protected. It’s why we signed on to support the Music Modernization Act, an important new bill recently introduced in both the House and Senate. One of its key provisions would allow rate court judges to finally consider all relevant market evidence when setting rates for performances on digital music services. This is a step in the right direction toward ensuring fair compensation for songwriters and publishers when their music is streamed on these platforms. For the first time in decades, we see a true opportunity for Congress to pass comprehensive legislation that would reform music licensing, with support not only from the music community but also from the digital companies and the broadcast industry. Music truly has the power to unite.


From the DOJ ruling, to the introduction of the Music Modernization Act, to the recent Copyright Royalty Board decisions that will increase royalties for streamed music, 2018 is shaping up to be a pivotal year for music creators, and BMI will keep pushing to ensure their voices are heard. We’ve never been more optimistic about the future of music than we are now. BMI has been forward-thinking from the start, when we opposed the prevailing trend at the time and opened our doors to songwriters of all genres, many of whom would become transformational figures in musical history. Today, our motto is “business as usual,” which for BMI means championing the art and profession of songwriting, continuing to break new ground, and paving the way for the ongoing creation of the music that we all benefit from and enjoy.

Michael O’Neill is president and CEO of Broadcast Music, Inc. (BMI).