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At the annual National Music Publishers Association conference, Makan Delrahim, head of the Department of Justice’s Antitrust Division, remarked that the DOJ is currently reviewing the consumer protection agreements decided upon by the Justice Department and ASCAP and BMI, the music industry’s two largest performing rights licensing organizations. What this means is that the Justice Department will soon choose between protecting the local music scene and lining the pockets of big money corporate music interests.
ASCAP and BMI are monopolies that control 90 percent of performing rights to songs. Virtually everyone that wants to publicly perform music, from restaurants to hotels to concert halls, must go through them.
ASCAP - BMI - History - Market - Share
Both ASCAP and BMI have a history of abusing their market share. Since their businesses hinge on managing intellectual property — an area where there is no true free market — there is little competition and hence no way of stopping their price gouging.
That’s why the federal government put them under consent decrees in the 1940s: to ensure that the music collectives provide establishments with licenses to their entire collections at fair market rates, with a rate court handling all disagreements. These settlements have significantly helped in stopping their practice of charging rates that might make sense for their bottom lines but don’t make sense for anyone else, not even the songwriters they allege to protect.
Decrees - Royalty - Rates - Songwriters - Music
Those who advocate for removing the decrees argue that doing so is necessary to increase the royalty rates of songwriters. However, I owned a live music venue for years and have firsthand knowledge that their payment problems are a result of not the consent decrees, but rather the strong-arm tactics of ASCAP and BMI themselves.
Without a doubt, everyone — including songwriters — should be paid fair market rates for their work. But as I mentioned in an interview with...
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