The document discusses consent decrees, which are agreements between parties to limit activities in response to regulatory concerns about potential market abuses. Specifically, it discusses consent decrees that ASCAP and BMI entered into addressing antitrust issues around their music licensing practices. It provides background on the decrees and considers potential modifications to them. Issues discussed include transparency of the music repertoires, allowing partial withdrawal of digital rights, bundling of rights, and changing the rate-setting process. Comments from music industry groups on both sides of the issues are presented.

1. COPYRIGHT IN THE US - MPA
COPYRIGHT & MUSIC PUBLISHING
SEMINAR
CONSENT DECREES
SAFE HARBOR
COLLECTIVE MANAGEMENT
11/5/15
Rick Riccobono
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2. CONSENT DECREES
Consent decrees are limitations agreed upon by parties in
response to regulatory concern over potential or actual
market abuses.
Intended to promote competition in the marketplace –
Songwriter protections from music publishers,
What is their relevance today?
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Rick Riccobono
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3. CONSENT DECREES
ADDRESS:
Antitrust issues in music licensing of the public performance
rights in musical works. PROs were found to have engaged
in “significant anticompetitive practices”
ASCAP’s actions, “would have resulted in a stifled and
stunted music industry”.
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Rick Riccobono
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4. CONSENT DECREE OF
1941
ASCAP prohibited from:
Providing an exclusive public performance license
Charging “unreasonable” licensing fees
Restricting membership from direct licensing
Discriminating between Licensees
Licensing Motion Picture Theaters
Offering licenses beyond 5 years
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Rick Riccobono
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5. FURTHER -
MODIFICATIONS
Do not jeopardize safeguards for songwriters, such as the
direct royalty payments by PROs and the 50/50 splits
Do not jeopardize competition or barriers of entry for
independent songwriters, publishers, and small music
platforms.
Must promote transparency, especially in repertoire,
licensing and royalty payments to songwriters.
Must not weaken the PROs by making them mere
administrative functionaries of the publishers
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Rick Riccobono
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6. WHAT THEY ARE
SAYING
The National Music Publishers Association (NMPA) suggests that movement away from
the Consent Decrees and toward a “free” and/or fair market[would result in more
competition and higher royalty payments for songwriters and publishers.
ASCAP has stated that the Consent Decrees “must be updated, if not eliminated … [as
they] exploit certain provisions to the detriment of the songwriters, composers and
music publishers who depend on public performance royalties for their livelihoods.”
BMI has stated that the Consent Decrees should be reexamined, particularly with regard
to their perpetual nature
BMI has made three primary or ‘immediate’ requests to the DOJ:
 To allow publishers to legally withdraw control of their digital rights without
exiting BMI altogether;
 To allow BMI to license more than just public performance rights - adding in
mechanical rights, lyric display, distribution, reproduction and synch rights to
become a ‘one-stop’ rights hub for licensors;
 To move the standard rate-setting forum from federal court to a binding arbitration
model.
Will BMI be competing as a music publisher and representing mechanical and other
rights?
11/5/15
Rick Riccobono
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7. ASCAP AND BMI
MODIFICATIONS OF
CONSENT DECREES -DOJ
QUESTION 1
Do the Consent Decrees continue to serve important competitive
purposes today? Why or why not? Are there provisions that are
no longer necessary to protect competition? Are there provisions
that are ineffective in protecting competition?
Competition in the music licensing space-transparent and
predictable licensing environment. The smaller licensee and
the function of blanket licenses
Protections for songwriters-50/50 performing rights income
split
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Rick Riccobono
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8. QUESTION 2
What, if any, modifications to the Consent Decrees would
enhance competition and efficiency?
Direct Licensing of certain rights, i.e. the allowance of partial
withdrawal of catalogue would create a more market friendly
licensing environment and lead to increased rates and the value
of music.
 How does this effect Blanket Licenses, compulsory
licensing and licensed by virtue of request?
 Modifications may be necessary but must not lead to chaos in
the market. A world of sync licensing?
 Transparency as a balance
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Rick Riccobono
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9. QUESTION 3
Differences in the Consent Decrees
 Bundling Rights-Performance, Mechanical and Synch
 The major publishers have threatened to remove their
entire catalogs from the PROs if the consent decrees
aren’t modified to serve their interests. To avoid this
outcome ASCAP and BMI advocate for partial catalog of
digital rights by the publishers in exchange for the ability
to bundle other rights.
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Rick Riccobono
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10. QUESTION 4
How easy or difficult is it to acquire in a useful format the
contents of ASCAP’s or BMI’s repertory? How, if at all, does
the current degree of repertory transparency impact
competition? Are modifications of the transparency requirements
in the Consent Decrees warranted, and if so, why?
 PRO and major music publisher coalitions. Lack of
Transparency.
 Pandora repertory requests to the PRO’s
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Rick Riccobono
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11. QUESTION 5
Should the Consent Decrees be modified to allow rights
holders to permit ASCAP or BMI to license their performance
rights to some music users but not others?
 Market driven, the value of music
 Smaller users path to licensing.
 Who represents the songwriter, the Indie Publisher?
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Rick Riccobono
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12. QUESTION 6
Should the rate-making function currently performed by the
rate court be changed to a system of mandatory arbitration?
 Favoring corporations over individuals
 No class action
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Rick Riccobono
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13. QUESTION 7
Should the Consent Decrees be modified to permit rights
holders to grant ASCAP and BMI rights in addition to “rights
of public performance”?
 Streamlining music licensing
 Bundling-unfair?
 What could be the motivations? Global licensing of digital
rights? The performance right follows the mechanical right X-
US.
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Rick Riccobono
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14. CONCLUSION
A matter of survival for the US PRO’s
Woeful rate structures-tens of thousandths of a penny per
stream?
Major music publishers and aggregated Indie music
publishers want the right to seek free market mechanisms
when licensing their music. Willing buyer/willing seller model
1st time in history technological innovation reduces PRO’s to
middle man status. Why use them to license Spotify, iTunes
etc. if you are a successful songwriter.
Writer flight and the emergence of new niche PRO’s
 Global Music Rights
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Rick Riccobono
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15. SAFE HARBOR
Safe Harbor Sec. 512 DMCA
A service provider shall not be liable for monetary relief if the
transmission of the material was initiated by or at the
direction of a person other than the service provider;
Thus the safe harbors, while imperfect, have been essential
to the growth of the Internet as an engine for innovation and
free expression.
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Rick Riccobono
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16. NO INFRINGEMENT
PROVIDING:
SP does not have actual knowledge that the material or
activity is infringing;
 in the absence of such actual knowledge, is not aware of
facts or circumstances from which infringing activity is
apparent; or
 upon obtaining such knowledge or awareness, acts
expeditiously to remove, or disable access to, the
material;
SP does not receive a financial benefit directly attributable to
the infringing activity, in a case in which the service provider
has the right and ability to control such activity; and upon
notification of claimed infringement responds expeditiously
to remove, or disable access to, the material that is claimed
to be infringing.
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Rick Riccobono
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17. SAFE HARBOR &
YOUTUBE
YouTube to operate an ‘opt-out’ rather than ‘opt-in’ streaming service
YouTube has an unfair advantage at the negotiating table, because the
company already has a rights owner’s content on its servers.
IFPI chief Frances Moore said: “The value gap is a fundamental flaw in our
industry’s landscape which sees digital platforms such as YouTube taking
advantage of exemptions from copyright laws that simply should not apply
to them. Laws that were designed to exempt passive hosting companies
from liability in the early days of the internet – so-called ‘safe harbours’ –
should never be allowed to exempt active digital music services from having
to fairly negotiate licences with rights holders”.
She added: “There should be clarification of the application of ‘safe
harbours’ to make it explicit that services that distribute and monetise music
should not benefit from them”.
They amass a body of content they become media platforms which, like
traditional media services, may make money placing advertising next to
content, or charging subscription fees for access to content. -
http://www.completemusicupdate.com/article/trends-why-the-music-
industry-hopes-to-put-safe-harbours-on-the-european-
agenda/#sthash.f7lBufKi.dpuf
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Rick Riccobono
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18. YOUTUBE AND FAIR
USE
You Tube is benefiting from the user-generated sources of
content so the DMCA safe harbor provisions should be
modified to take that into account.
The DMCA exacerbates the information problem by
encouraging service providers not to look at their users’
posted content in advance of a notification lest they acquire
“actual knowledge” of infringement (or be sued on that
claim) see: Jonathan Zittrain, A History of Online
Gatekeeping, 19 HARV. J. LAW & TECH. 253, 256 (2006)
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Rick Riccobono
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19. FAIR USE AND SAFE
HARBOR
“Fair use is not just excused by the law, it is wholly
authorized by the law. The Lenz v Universal Music Publishing
Group “Dancing Baby” ruling is in favor of Lenz and thus fair
use and establishes that fair use is not just considered an
exemption from copyright infringement but a “Right” under
the DMCA.
Google receives 350 million notice and takedown requests in
a single year
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Rick Riccobono
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20. MARTIN MILLS
COMMENTS ON SAFE
HARBOR
We are at the point at which notice and take down must
become notice and stay down” – while highlighting a
comparison that’s increasingly popular within the music
industry in 2014, between YouTube and Spotify.
“YouTube says it’s paid out a billion dollars to music rights
owners – So what if the real monetary obligation is many
multiples higher!! but so has Spotify, from one thirtieth as
many users. That economic discrepancy is because of the
unreasonable economic advantage YouTube has over its
digital service competitors because of its use of the safe
harbor provisions,” said Mills.
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Rick Riccobono
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21. COMMERCE AND FREE SPEECH
BMG and ROUNDHILL CONTEND:
o“Cox has had actual and ongoing specific knowledge of the
repeat infringements by its subscribers,” the publishers’
complaint reads. “Nonetheless, Cox has repeatedly refused
to terminate the accounts of repeat infringers.
o“The reason that Cox does not terminate these subscribers
and account holders is obvious – it would cause Cox to lose
revenue.”
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Rick Riccobono
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22. COLLECTIVE
MANAGEMENT
To grant licenses to commercial users (TV channels, radio
stations, online music service providers) on behalf of the
rightsholders; and
To collect royalties and redistribute with as little deductions
as possible to rightsholders.
Pretty Simple, right?
 Bureaucracy and Transparency
 An accounting function
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Rick Riccobono
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23. THE SKEWED VALUE
OF MUSIC
BMI notes in comments to the U.S. Copyright Office: "When
multiple rights implicate both the sound recording and the
underlying musical work, it is critical that there be a fair and
equitable relationship between the compensation afforded
sound recordings and the songwriters and publishers whose
underlying works provide the foundation for those
recordings. Currently, for the transmission of sound
recordings containing musical works, recording artists are
paid as much as seven times what songwriters and
publishers are paid for the mechanical rights, and as much
as twelve times for the public performance right.”
May be a function of who gets to the table first
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Rick Riccobono
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