Songwriters beware: the federal government has involved itself in how you get paid, and surprise! You stand to make a lot less money.
The Department of Justice is considering requiring ASCAP and BMI to engage in what the music industry calls “100% licensing.” Without getting too deep in the weeds of music law, here’s some background:
Digital music has changed the game for musicians, licensing, and royalties. For ASCAP and BMI, the two biggest performing rights organizations, digital music has made things a bit complicated. As things stand, a digital music service provider (think Pandora) is required to obtain agreements with both ASCAP and BMI if a song was penned by writers signed to the separate organizations. While negotiations could be – and often were – slowed by the rule, it nonetheless ensured that writers and performers received fair compensation for their hard work.
In an attempt to streamline the process (and no small thanks to the lobbying efforts of digital music providers like Pandora), the Justice Department is considering changing the rules and allowing the Pandoras of the world to license a song from either ASCAP or BMI, but not both.
In practice, this would be a disaster. Suppose a songwriter, signed to BMI, co-wrote a smash hit with an ASCAP-affiliated writer. Pandora would be able to license the song under ASCAP’s terms, paying no mind to the terms of the BMI writer. The BMI writer would find his or herself entirely at the mercy of a contract that he or she never signed. As Pandora would obviously choose the more appealing (read: cheaper) licensing agreement, the BMI writer would invariably lose money.
The music industry has been an absolute bloodbath for the past decade. Sales are at historic lows. In this day and age, songwriters need all the help that they can get. In its attempt to “fix” this, the federal government is on the verge of once again breaking things further.