Friday, 6 January 2017

Now BMI takes on the US Radio industry

Last month, Irving Azoff’s US collection society, Global Music Rights (GMR), launched a legal attack on the Radio Music License Committee (RMLC), which represents over 10,000 commercial radio stations in the United States. The suit followed an action by the RMLC that moved that GMR be enjoined from licensing its catalogue of songs for more than a rate that represented the pro-rata share of its catalogue against those of the other PROs (primarily BMI and ASCAP, and SESAC) while its broader antitrust action is aimed at establishing an appropriate mechanism for determining those rates in the future - and forcing the rights agency to submit to independent arbitration to set the rates broadcasters must pay to play the songs it represents. Azoff formed GMR in 2013 to compete with ASCAP and BMI, which together control approximately 95% of music copyrights. The other independent and privately owned PRO in the USA, SESAC, recently entered into a settlement of with RMLC, following an antitrust action similar to the one filed against GMR.

Against a background of many songwriters and music publishers believing that commercial radio stations in the USA and elsewhere are paying far too little to use their work, GMR's lawsuit accused the RMLC of operating a ‘cartel’ which deliberately suppressed royalty payments to songwriters for music used across its network and targeted over 10,000 radio stations with an action that would have forced the stations to acquire a license in order to play music associated with any GMR songwriter artist (GMR have published a roster that includes Jay Z, The Eagles, Pharrell Williams, Adele, Daft Punk and hundreds more). One blip was that in response, heavy metal band Anthrax penned an open letter to Azoff for mistakenly including the band in the GMR "fair pay for fair play" lawsuit against the radio stations. The band suggested that whilst they have performed one song which is a composition by members of Metallica and Megadeth (the latter being represented by GMR) they are not represented by GMR and the error could discourage radio stations from playing Anthrax songs. 

On December 24th, GMR offered RMLC stations a temporary license to play songs by its clients. In a statement GWR said

"Today, GMR has offered a license to all radio stations represented by the RMLC allowing the stations to play GMR's repertoire in exchange for specified license fees. This license extends ‪through September 30th, 2017 and gives everyone additional time to negotiate long-term licenses with GMR. GMR offered this license to the RMLC last month, but the RMLC refused it and, instead, chose to sue and seek an injunction. With today's agreement, the RMLC has withdrawn its request for an injunction and radio stations across the country will have the opportunity to offer their listeners GMR's quality music."

Elsewhere, fellow PRO ASCAP has since re-signed a deal with RMLC for the next five years, covering its repertoire at a mutually agreed rate.

But the other major (and regulated) PRO BMI hasn't been so amenable.  The society has now filed an action in Federal Rate Court to set interim fees for radio stations represented by the RMLC – while BMI and the RMLC negotiate the terms of a new five-year deal beginning in 2017.

BMI said that the RMLC had "proposed an interim rate well below BMI‘s previous deal, the effect of which would have a significant impact on the royalties BMI pays to its songwriters, composers and music publishers" saying "The RMLC has justified its proposed rate based upon incomplete and incorrect information regarding BMI‘s radio performances. BMI disagrees fundamentally with the RMLC’s proposal and, consistent with past practices, is asking the Court to maintain its most recent rate while new terms are negotiated."

Mike Steinberg, Senior Vice President of Licensing for BMI, told reporters: “We attempted to negotiate in good faith with the RMLC for many months, and just before the end of the year, the RMLC presented an interim rate that significantly undervalues the work of BMI’s songwriters. Given the unmatched caliber of BMI‘s repertoire, our superior market share on radio, and the ever-increasing value that BMI music brings to the radio industry across all its platforms, we believe the RMLC’s proposal falls well short of what is in the best interests of our affiliates."

In an extreme version of a similar situation,  albeit here with a public service broadcaster, Bulgarian press reports said that as of 00.01 on January 1, 2017, Musicautor, Bulgaria’s non-profit society of composers, lyricists and music publishers, took action that has forced the country's national radio to play only music produced before 1945:  indeed, instead of hearing the official Bulgarian anthem at midnight, as they do every year, listeners to Bulgarian National Radio (BNR) heard an alternative version performed by BNR’s own choir and symphonic orchestra - and now have a diet of folk, classical and some jazz music. Musicautor, which hold the copyright to over 14,000,000 songs from Bulgarian and worldwide artists, suspended its contract with BNR and BNR is prevented from playing much contemporary Bulgarian and foreign music until the fee issue is resolved. The PRO has asked for a threefold increase in its payments, saying this would bring payments into line with those made by other European public radio broadcasters to use music.

US radio industry accuses Global Music Rights of monopoly abuse

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