MUSIC LICENSING HISTORY

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The History of  Broadcast Music Performance Rights
(Used by permission from the Television Music License Committee.)   http://www.televisionmusic.com

There are a number of separate copyrights in music, but the history of ASCAP, BMI, SESAC and the broadcast industry involves only one, the “small” or “non-dramatic” public performance right. For further information on music copyrights, click on “copyright basics.”

The Creation of ASCAP
The right of copyright owners to control the public performance of their music was first established by Congress in the late nineteenth century. In 1914, a group of composers and publishers formed ASCAP (American Society of Composers, Authors and Publishers) to enforce their small performance rights, and to create a joint pool of musical compositions that could be sold in bulk to music users. Soon thereafter, ASCAP created the so-called “blanket” license that gave the user the ability to utilize any musical composition within its entire repertory by paying a single license fee to ASCAP. ASCAP was then responsible for distributing these payments to its members. Since most performances were “live” at the time (which made it difficult for composers and publishers to keep track of performances of their works and for music users to obtain music performance rights directly in a timely manner), this blanket license made sense for both users and composers.

In ASCAP’s early days, composers had to “qualify” for membership in ASCAP by establishing themselves as songwriters or by being represented by a publisher member. Since ASCAP was the only performing rights organization (“PRO”), its member publishers and composers had significant control over who could profit by writing music for public performance, and since ASCAP was the only significant source of music, ASCAP had tremendous leverage in licensing negotiations with users. ASCAP’s aggressive use of this leverage led the United States Department of Justice (“DOJ”) to commence antitrust actions against ASCAP beginning in the 1930s.

BMI
In 1939, radio broadcasters decided that ASCAP’s demands for compensation were too high and its limitations on membership were too restrictive. As a result, the radio broadcasters formed their own PRO, Broadcast Music, Inc. (“BMI”). BMI provided radio broadcasters and other music users with an alternative source to ASCAP for music performance rights, and offered composers open enrollment.

The 1941 ASCAP and BMI Consent Decrees
In 1941, the Department of Justice sued ASCAP again for violations of the Sherman Antitrust Act. The result of this suit was a voluntary Consent Decree in which ASCAP restricted its operations and agreed to government oversight of its relationships with composers and publishers and music users. The Consent Decree provided that ASCAP could not obtain from composers and publishers of music the exclusive right to license performances of their works; it could not seek payments for programs that did not contain ASCAP music; it was required to offer radio broadcasters meaningful per program licenses and network licenses; it could not discriminate between users who were “similarly situated”; and it was required to distribute royalties to its members in a “fair and non-discriminatory manner.” In the same year, BMI signed a similar Consent Decree. The provisions of the 1941 BMI Consent Decree were almost identical to those of ASCAP’s 1941 decree.

The 1950 ASCAP Amended Final Judgment
A number of things happened during the 1940s that caused the Department of Justice to amend the ASCAP Consent Decree in 1950.

First, television developed as a commercial medium, and ASCAP began licensing radio broadcasters, who were the owners of the first television stations, to perform music in their television programming.

Second, ASCAP’s licensing practices concerning motion picture theater exhibitors were declared unlawful. ASCAP had begun licensing motion picture theater exhibitors in the 1920s during the “silent movie” era, when the only music performed in a theater was played live (such as by a piano player). Because theaters did not know in advance what music was going to be played, it made sense to cover these performances under a blanket license in order to avoid any question of copyright liability. Even after the creation of “talking pictures,” in which music was pre-recorded with the motion picture, ASCAP continued to license performance rights to the motion picture theater exhibitors. Thus, when a motion picture theater exhibitor received a movie from a producer, all of the rights needed for that exhibitor to display the film came “in the can” of film, except for the music performing rights.

In the 1948 Alden-Rochelle case, the court found that ASCAP was in violation of the Sherman Antitrust Act in its dealings with motion picture theater exhibitors. The Court decided that the practice of withholding performance rights from movie producers in order to require licenses from movie theater exhibitors (who had no control over the music in the films they displayed) was unlawful. ASCAP was enjoined from licensing motion picture theater owners, and ultimately, ASCAP’s members were forced to negotiate directly with movie producers for payment of music performance rights in films shown in movie theaters.

Third, although the 1941 ASCAP Consent Decree prohibited ASCAP from entering into “exclusive” arrangements with composers and publishers, ASCAP had created a series of rules and restrictions on its members that had the effect of granting to ASCAP exclusive rights to license performances of its members’ music.

Among the 1950 revisions to the ASCAP Consent Decree were provisions that strengthened composers’ and broadcasters’ rights. Most notably, the Amended Decree established a “rate court” affording users the protection of automatic licenses and freedom from copyright infringement concerns, as well as the right to ask a court to set “reasonable” fees for ASCAP licenses in the event that ASCAP and such users were unable to reach an agreement.

Interestingly, although the 1950 amended ASCAP Consent Decree (referred to as the “Amended Final Judgment” or “AFJ.”) carried forward the Alden-Rochelle injunction preventing ASCAP from licensing motion picture theater exhibitors, this limitation did not apply to films or other pre-recorded programs broadcast on television. ASCAP was able to convince the government that these limitations should not apply to the new television industry at least in part because television was still a live medium.

Brief History of NRBMLC
In the late 70s a group of religious-formatted station owners attempted to negotiate its own license with ASCAP, then the largest P.R.O. These broadcasters believed their radio stations used music in a way that is different from the way most general market stations use music, and they wanted their ASCAP fees to reflect this fact.

Although the ASCAP talks proved unfruitful at the outset, they highlighted the need for more solidarity among similarly situated stations. Because most of these broadcasters were members of the NRB, that association offered to be an “umbrella” to this fledgling license committee, giving it stability and a broader membership base. By the mid-eighties the NRBMLC became an NRB “standing committee,” and was soon instrumental in negotiating its first special license with BMI.

The stations represented by the NRBMLC were not opposed to paying royalties to the copyright owners, but their formats were such that there was minimal reliance on copyrighted music. The common denominator of these stations was that they sought a fair, usable, “per program” license that would facilitate the payment of license fees in more direct proportion to music usage.

The NRBMLC is one of two industry music license committees representing commercial radio stations. Over the years, the Radio Music License Committee (the “RMLC”) has played a vital role in representing mainstream radio stations to the P.R.O.s. Both the NRBMLC and the RMLC negotiating committees are largely staffed by volunteers.

In 1998 the NRBMLC signed landmark agreements with ASCAP and BMI for the nearly 600 radio stations that had joined its ranks. These licenses came only after years of complex and costly litigation and legislative measures taken by the NRBMLC.