DOJ Counterpunches Industry In Fight Over Royalties

ASCAP and BMI took one to the jaw June 30 when the industry giants were informed regulatory agreements wouldn’t be changed in their favor and they might soon be forced to adopt a change which could greatly reduce royalty rates.

Department of Justice lawyers informed industry reps that they will be forced to pay “100 percent licensing,” which would mean that each credited songwriter can license the entire song.

Performing rights societies have collaborated to divvy up licensing royalties, even when the various songwriters were represented by different groups. The new terms described by the DOJ could mean that one licensing organization representing a songwriter would take the entire chunk of change for each spin of the song, even if other responsible songwriters aren’t represented by that org.

Critics of this scheme say it could see songwriters paid even less for their work and discourage them from collaborating if they are in different PROs and, in extreme scenarios, could “break” the systems for paying out artists and songwriters. The New York Times reports the DOJ’s recommendation will need to be approved by federal judges in court before having any effect. The decision for 100 percent licensing would be a win for tech companies who are now regularly butting heads with the music industry on how to pay for digital plays.