British Music Managers Forum Responds to Sony/ATV’s Letter to US Songwriters

16 July 2014

In response to this report the MMF have issued the following statement:

The Music Managers Forum shares the concerns expressed by Sony/ATV as to the complexity of licensing systems in the USA and worldwide.  Part of the problem is indeed the constraints in the USA on licensing negotiations imposed by the outdated Consent Decrees that govern ASCAP and BMI and prevent them securing a fair market rate for their members.  That the US Department of Justice is currently reviewing the Consent Decrees is a positive development.

However, on behalf of our songwriter clients, the MMF is alarmed at the suggestion by any music publisher, especially one with such considerable market power as Sony/ATV, that they would withdraw from the performing right organisations (PROs) and attempt to issue licences directly to US users thus complicating licensing.

Sony/ATV cannot withdraw any non-US writers’ works from the US PROs and issue licences for their work as they do not own the right in any songs written by any writer who is a direct member of a PRO outside the USA.  These non-US writers assign their performing right directly and exclusively to their local PRO on a global basis.  The right is owned by the PROs who have the sole authority to issue licences – to the exclusion of the writer and the publisher. These non-US rights are passed exclusively to the US PROs by the non-US societies.

Publishing contracts outside the USA only give the publisher a right to share in the revenue from the performing right, but not ownership of the right itself.  For example, as long as The Beatles, the Rolling Stones, Coldplay, Jean Michel Jarre and Adele etc. continue as members of their local PRO, no US publisher can issue licences for their work. As far as we’re aware, the letter from Sony/ATV was not sent to non US writers, once again highlighting the complications posed for licensees of territorial posturing in a global digital marketplace.

While the MMF is wholly sympathetic to Sony/ATV’s frustrations, the threat of withdrawal is an issue for the entire global community of composers and societies. There are at least four other reasons why US withdrawal and direct licensing are a risk to writers’ livelihoods.

Potential licensees will still have to go via the PROs as well as the publishers which could lead to differential pricing and more complicated and more costly transactions.

Writers’ contracts routinely state that they are not entitled to be paid a share of revenue that is paid as advances, lump sums or is not able to be “directly and identifiably” attributed to their work.  How confident can writers be that they will be paid their shares of direct licence monies?

Co-writing songs is a common practice.  How does a co-writer signed to a different publisher get paid when his writing partner is signed to a publisher who is issuing direct licences?  He has no contractual relationship with his partner’s publisher to rely upon.

The PROs allocate unique identifiers to each song or composition (the International Standard Works Number or ISWC).  These have now been allocated to over 95% of the world’s musical works and their use across the globe ensures that usage and works are correctly matched and writers paid what they are entitled to be paid.  Many music publishers operate their own, different identifiers. The lack of common work identifiers between publishers and the PROs complicates revenue allocation.

The global network of non-profit PROs has served the consumer, the music users and the song writing and publishing community well for over a century.  Despite the challenges of the digital environment, PROs provide economies of scale and streamlined licensing which keep transaction costs manageable. Writers sit on their Boards and can influence policy. While the PROs may not be perfect, they allow creators a voice and a direct income stream.  Adjustments to this system should be nuanced and carefully thought through.  More importantly to our members’ clients, solely national focus poses a grave threat to the livelihoods of every writer, American or not.

See the full MMF UK statement here.

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