can the pro’s survive in the digital age?

Megatrax CEO & Founder Ron Mendelsohn
Megatrax CEO & Founder Ron Mendelsohn

There have been a number of recent developments which call into question the relevance of performing rights societies such as ASCAP, BMI & SESAC in the digital age.

One major publisher’s recent decision to withdraw digital music rights from ASCAP is one such development. Clearly the future of the music and entertainment industries lies with Internet streaming services such as Spotify, Pandora, Netflix, YouTube and Amazon Prime. It is essential for the survival and continued relevance of the PROs that they continue to do what they do best with regard to these online services: offer one-stop blanket licenses covering their entire repertoire. The alternative is unthinkable: it would be an impossible burden for every Internet site and online service to negotiate separate performance licenses with each individual publisher, songwriter and composer. The end result of such a chaotic scenario would be that many sites would either cease to exist or opt to stop using music altogether.

Yet the greatest risk of all posed by circumventing the PROs is that publishers, songwriters and composers would lose the formidable negotiating clout that these societies provide.  While major publishers might be able to extract reasonable licensing fees from online services, there is a slim to zero chance that smaller publishers or individual composers could possibly negotiate reasonable fees on their own. Direct licensing in any form ultimately weakens the collective bargaining power of writers and publishers and invariably leads to an erosion of rights and dwindling fees over the long term.

The PROs are not perfect, but they represent the best hope for publishers, songwriters and composers to safeguard performing rights and maximize performance income. There are already a myriad of forces aligned against these ascapcollection societies; many technology companies routinely question their legitimacy and balk at the need to pay performing rights fees. One only needs to witness ASCAP’s ongoing legal battles with YouTube, AOL and Yahoo to appreciate the magnitude of the opposition. Tunecore’s recent efforts to circumvent the PROs and collect performing royalties directly for their members is yet another example of the kind of threats lurking on the horizon.

There are some positive developments, however.  ASCAP recently arrived at a settlement with YouTube and signed blanket agreements with both Spotify and Netflix. It is important that these trends continue and that the PROs continue to establish themselves as the “go-to” source for performance licensing in the digital realm.  It is an uphill battle. The least we can do as an industry is to stand behind the PROs and do everything possible to support their efforts.

In an age where music can be instantly copied, streamed and transmitted anywhere in the world, enforcement of copyright law and protection of music rights is not an antiquated or obsolete notion; it is in fact a concept that is more relevant and critical than ever before.

– Ron Mendelsohn  9-11

  1. Jeff Price

    Its an interesting and important point, however, I think there is undervaluing of the potential bargaining power of the leaders emerging in the new music market.

    Not to mention an unwillingness and lack of want of digital services to have to deal with PROs.

    Before we can tout the rates negotiated by the PROs, should we not know what they are? ASCAP/BMI are “hired” by songwriters/publishers to represent them. Despite this, the PROs refuse to disclose the rates negotiated on behalf of its clients.

    To assure the dire prediction you describe does not happen, the industry requires transparency. WIthout that, the artists, songwriters and publisher have no idea if the PRO is doing their job nor the ability to negotiate directly for a comparable rate with a entity looking to publicly preform a song.

    And as the DMX vs. BMI legal decision shows, the PROs are not free to set the market rate.

    jeff price

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