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“It’s Been a Hard Day’s Night” for Songwriters: Why the ASCAP and BMI Consent Decrees Must Undergo Reform
Brontë Lawson Turk
NOTE

  The full text of this Article may be found by clicking here.

26 Fordham Intell. Prop. Media & Ent. L.J. 493
Article by Brontë Lawson Turk*

INTRODUCTION

 

[C]

hristina Aguilera’s hit song, “Beautiful,” topped the international music charts,[1] won the 2003 Grammy Award for “Best Female Pop Vocal Performance,”[2] and received international critical acclaim for its lyrics about self-acceptance and inner beauty.[3] Aguilera earned a GLAAD Media Award,[4] and Stonewall, a UK-based LGBT-rights organization, labeled it the number one most empowering song of the decade.[5] As the track’s recording artist, Aguilera’s financial gains reflected the song’s success when her album sold more than 4.3 million copies.[6] The same can’t be said, however, for Linda Perry—the woman who wrote and published the hit.[7] In one fiscal quarter of 2012, Pandora played “Beautiful” approximately 12.7 million times and yet Perry made less than $350 dollars in streaming royalties.[8] While record labels and recording artists receive up to ninety-seven percent of a song’s revenue through royalties when the song streams over “new media,”[9] such as Internet radio services like Pandora or Spotify, songwriters are often paid as little as three percent.[10] The inequality in compensation between recording artists and songwriters has never been as extreme as it is today.[11]

 

Songwriters are paid through Performing Rights Organizations (“PROs”).[12] These organizations negotiate license agreements for the use of songs, collect any royalties the works generate, and then distribute the royalties back to the songwriters.[13] In the 1940s, the Department of Justice (“DOJ”) investigated the two largest PROs in the United States for allegedly engaging in anti-competitive conduct.[14] To avoid the threat of prosecution, both organizations signed governmental consent decrees establishing various licensing requirements and restrictions.[15] The decrees have not been updated, however, in more than fifteen years.[16] Neither decree has been revised to account for the introduction of digital technology, including the recent advent of Internet radio. Consequently, these antiquated decrees restrict the organizations’ ability to secure reasonable licensing rates for performance rights in new media. As the music licensing system stands, record companies and recording artists are making considerably more money than their counterparts in songwriting, composing, and publishing, with respect to new media services.[17]

 

In order to guarantee reasonable fees for songwriters, composers, and publishers, the consent decrees[18] must undergo critical reform to account for how music is licensed in new media.[19] Part I of this Note will provide background on the mechanics of music licensing, both traditional and through modern mediums, in order to explain why the two largest PROs initially entered into governmental consent decrees. Part II will discuss recent judicial determinations of “reasonable” licensing rates for public performances in new media and demonstrate the discrepancy in compensation between songwriters and their sound recording counterparts, namely record companies and recording artists. Finally, Part III will argue that the solution to this problem is through consent decree reform. The decrees should be modified to allow songwriters to withdraw their digital rights in order to separately license songs in new media. A new PRO should then emerge in the market place to account solely for public performance rights in new media, leaving traditional licensing to the existing PROs. Additionally, the current judicial process for setting rates, known as the “rate court” system, should be replaced with expedited, binding arbitration. Making these important changes to the music-licensing system will work towards bridging the gap in compensation inequality between songwriters and recording artists.

 

 

 

* Associate Editor, Fordham Intellectual Property, Media & Entertainment Law Journal, Volume XXVI; J.D. Candidate, Fordham University School of Law, May 2016; B.A., Broadcast & Digital Journalism, University of Southern California, 2013. Thank you to Theodore N. Kaplan for inspiring me to explore such a fascinating topic and to Professor Ron Lazebnik for his guidance in developing this Note.

 

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