Should the music industry really do away with the ASCAP and BMI Consent Decrees?

Not according to major streaming services like Spotify, Pandora/Sirius, Amazon Music, and YouTube owner Google/Alphabet.  As the U.S. Department of Justice deliberates over whether to trash the decades-old decrees for the licensing of public performances, the streaming services — represented by DiMA — have issued a dire warning of a Decree-less future.

In a formal statement submitted to the DOJ ahead of the weekend — and subsequently emailed to Digital Music News — the message from DiMa was starkly clear.  “We are living in a golden age of music in which fans and creators alike are benefiting from a highly competitive marketplace that allows any piece of music to be enjoyed wherever and whenever we want, all at the push of the button,” the blue-sky statement begins.

“This benefits music fans, artists, songwriters and all of us in the music ecosystem, which is why it is no surprise that everyone from small businesses and restaurants to the streaming platforms DiMA represents have had a singular message for the Justice Department: the ASCAP and BMI consent decrees are vital to ensuring a robust and competitive music marketplace today and for the future.”

Removing the Decrees, especially without any secondary licensing plan in place, would lead to outright chaos.  “Terminating or choosing an arbitrary end date for these well-established decrees prior to a new legal framework being established would thrust the music marketplace into chaos,” the statement continues.

“And make no mistake, the resulting chaos will be felt by everyone in the music industry, but most of all by consumers: prices will rise, competition will deteriorate and the quality and variety of music readily available to music fans will decline.”

Also joining DiMA in the warning was the Radio Music Licensing Committee, or RMLC, which also has a strong interest in maintaining regulated, low-cost performance licensing.

Ironically, even though streaming platforms are slowly cannibalizing traditional radio and their attempts to transition online, both camps have a very similar interest when it comes to keeping publishing licensing costs low.

Here’s the complete statement, shared by DiMA CEO Garrett Levin to DMN:

“We are living in a golden age of music in which fans and creators alike are benefiting from a highly competitive marketplace that allows any piece of music to be enjoyed wherever and whenever we want, all at the push of the button. This benefits music fans, artists, songwriters and all of us in the music ecosystem, which is why it is no surprise that everyone from small businesses and restaurants to the streaming platforms DiMA represents have had a singular message for the Justice Department: the ASCAP and BMI consent decrees are vital to ensuring a robust and competitive music marketplace today and for the future.

“The competitive protections provided by the decrees have been a cornerstone in the successful evolution of the U.S. music industry into the economic and cultural juggernaut it is today. Terminating or choosing an arbitrary end date for these well-established decrees prior to a new legal framework being established would thrust the music marketplace into chaos. And make no mistake, the resulting chaos will be felt by everyone in the music industry, but most of all by consumers: prices will rise, competition will deteriorate and the quality and variety of music readily available to music fans will decline.

“Given the paramount importance of maintaining these competitive protections, DiMA and the Radio Music License Committee today called on the Department of Justice to formally establish a blue-ribbon federal advisory committee to assist in the review process. Such a committee of industry stakeholders, including artist and consumer representatives, could fully study the decrees and provide helpful policy recommendations to DOJ and Congress. This is a critical step to guaranteeing a vibrant competitive music marketplace for today, tomorrow, and for generations to come.”

The groups also entered a more elaborated breakdown on the matter.

That broadened statement delineates the arguments against the Decrees in greater depth, and includes a recommendation to create a Federal Advisory Committee instead of a ‘rushed comment period’.  It also raises the reality that major publishers, as well as their ASCAP and BMI agents, will attempt to dramatically increase performance licensing fees if the Consent Decrees are lifted.

The Department of Justice first enacted the Consent Decrees in 1941 to prevent anti-competitive pricing in the performance licensing market.  That licensing has been administered by two major groups, ASCAP and BMI, for which the Decrees remain in effect today.

The result of the Decrees was that any business in the United States could play virtually any song they pleased, so long as they paid relatively low-cost statutory fees.  That also extended into traditional radio and online radio and even on-demand streaming formats, though publishers argue that the Decrees are out-of-date and run afoul of fair, open market practices.

Both ASCAP and BMI have been protesting the Consent Decrees for decades, and not one employee of either group has worked in an environment without the regulations in place.  All of which makes it fairly exciting that the DOJ is seriously considering removing the statutes, though the removals would certainly introduce lots of uncertainties for all sides.

And, for those looking for a serious deep-dive on the matter, here’s the full, to the U.S. Department of Justice.