New Proposed Legislation Sets Up Showdown Over Online U.S. Music Rights Database

An effort is brewing in Washington to get an authoritative online database of music rights information built for the United States. It started last week as a bill called the Transparency in Music Licensing and Ownership Act. (It has neither a catchy acronym nor even a bill number at this time of writing, so we’ll just call it TMLOA.) It calls for the U.S. Copyright Office to build, maintain, and regulate an online database of information about all musical compositions and sound recordings, and it limits the availability of damages that rights holders can sue for if they don’t feed data to the database. The bill’s lead sponsor is Jim Sensenbrenner, a veteran Wisconsin Republican.

Whenever an industry is threatened with government regulation, the common next step is for that industry to issue a statement that says, “Relax, we can take care of this ourselves.” That’s exactly what happened here: it was the gist of a press release issued by ASCAP and BMI earlier this week. The two major PROs promise to aggregate and clean up their data on musical compositions and performing rights, and make it freely available online. They claim to have been working on this joint initiative for over a year and that they will launch the first version of the combined database by the end of next year.

An authoritative online database of music rights information is badly needed; the events of the last two weeks look to be the beginning of a protracted set of arguments over how to accomplish it, with the “threat” of government intervention looming in the background. Previous efforts to do similar things elsewhere, such as the European-originated Global Repertory Database (GRD), were notable failures.

There are many reasons for the GRD’s failure, but one of them was a lack of sufficient incentives (carrots and sticks), apart from the broad sentiment that such a thing would benefit the industry. The EU government cajoled many industry stakeholders into supporting it, but it neither proposed to fund its operation (carrot) nor mandated it by law (stick). This time there’s a clearer incentive structure, which derives from the industry factions that lobbied for TMLOA.

The group behind the bill is a recently-established one called the MIC Coalition (for “Music Innovation Consumers” and pronounced “mike” as in “microphone”), a “strange bedfellows” group whose membership includes trade associations from the liquor and hospitality industries (American Beverage Licensees, Wine America, Brewer’s Association, American Hotel & Lodging Association, National Restaurant Association) as well as the radio (DiMA, NAB, Radio Music Licensing Committee) and tech (CTA, CCIA) industries. The liquor and hospitality industries are interested because of the venue licenses that many bars and restaurants have to take from PROs such as ASCAP and BMI.

The MIC Coalition arose out of the Department of Justice’s recent review of the antitrust Consent Decrees governing ASCAP and BMI.  They came out in support of the DOJ’s decision last year to uphold the Consent Decrees which constrain the PROs’ ability to license compositions. They view the PROs’ licensing schemes as ambiguous and expensive, and their enforcement tactics for venue licensing as overbearing. Rep. Sensenbrenner is also known to be no friend of PROs, having introduced a law in the late 1990s that reduced venues’ music licensing responsibilities.

The bill calls for Congress to appropriate funds for the Copyright Office (which sits within Congress) to build the database; in other words, U.S. taxpayers would fund it. But while it’s one thing to build a database, it’s quite another to input the complete, accurate, and timely data that’s necessary for it to function. That has to come from music rights holders.

And here’s where the other incentive comes in: the TMLOA states that if rights holders don’t provide the data for a given work, they wouldn’t be able to sue certain entities for statutory damages for infringements of that work. Which entities couldn’t be sued for statutory damages? Essentially, the companies represented by the MIC Coalition. In effect, this means that in order to qualify for statutory damages, copyright owners would not only have to register their copyrights but also provide rights holder data to the database.

The TMLOA specifies that the database should contain these fields: title, copyright registration date (if any), identification of owners, identification of licensors (such as PROs and mechanical rights licensing agencies), standard identifiers (ISWCs or ISRCs), and for recordings, names of featured artists, album titles, labels, and catalog numbers. The bill calls for the database to be accessible through the Copyright Office’s website, freely searchable, interoperable through APIs, and exportable in XML and spreadsheet formats.

In terms of how the database would be designed and maintained, the bill calls for the Copyright Office to convene a working group with equal numbers of members representing rights holders, music licensees (including online music services as well as venues), and consumer advocates to recommend technical capabilities and standards for the database. The working group would convene every three years to make recommendations for technological updates.

There are major problems with both the TMLOA and the PROs’ efforts to stave it off. In the coming months, we’ll learn how or if those problems can be solved.

To start with, the TMLOA has to overcome two fairly significant hurdles in order to get any traction in Washington. First is the Republican-controlled Congress, which is generally averse to regulating industry and spending taxpayers’ money in this way (ironically, Sensenbrenner is rated as a very conservative Republican). Second is that it depends on the cooperation of the Copyright Office — which has a seriously out-of-date technical infrastructure and could possibly be moved to the Commerce Department, from the Legislative to the Executive Branch of government.

Beyond that, music rights holders, especially on the music publishing side, will see the incentive structure as unfairly biased. While it’s hard to find anyone who will publicly disagree with the need for things like accuracy and transparency in music licensing, rights holders will see the TMLOA as an all-stick, no-carrot deal. Or if not no-carrot, at least a small carrot at the end of a very long string. They won’t accept diminished abilities to sue for statutory damages, at least not without something in return.

The other major problem is on the rights holders’ side. Even if ASCAP and BMI manage to aggregate and clean up their databases, the result will fall short of what’s needed. Although those two are by far the largest PROs in the United States, with a combined 90% of compositions in their databases, they are only two out of four PROs. Global Music Rights (the newest PRO) may not manage anywhere near as many compositions, but its catalog includes musical works by some of the biggest pop stars on the planet: Bruce Springsteen, the Eagles, John Lennon, Metallica, The Who, Prince, Pharrell Williams, etc., etc., etc. — music that’s particularly likely to get played on the radio and in bars and restaurants. In addition, the PROs’ own data isn’t complete. It lacks some information about things like ownership shares and other PROs’ ownership interests, and the standard ISWC identifier for musical compositions isn’t used as consistently in the U.S. as it is elsewhere.

Furthermore, PROs only manage performing rights to musical compositions. They don’t manage mechanical rights (or other rights that aren’t relevant to the MIC Coalition’s members, such as sync rights), and they aren’t involved with sound recordings. The database described in the TMLOA needs to include all of those. Many other organizations would have to feed data to this database, including music publishers, mechanical rights licensors like the Harry Fox Agency, record labels, and indie artist aggregators like TuneCore and CD Baby. And there’s the lingering problem of matching sound recordings to their underlying compositions.

Even then, if you put all of the current data from all these organizations together, you don’t end up with 100% complete, accurate, and up-to-date data about music in the U.S.  (One wonders whether certain members of the MIC Coalition even realize this. It’s worth noting that the organizers of the GRD knew full well about music data problems and admitted them openly at the start of the project.)

One hopes that the purpose of the TMLOA is to bring music rights holders to the negotiating table rather than because Rep. Sensenbrenner or the MIC Coalition seriously believes that this bill will pass in its current form. The two sides of this issue could come to some sort of high-level agreement on the terms of legal mandates and government oversight (if any), but an overarching question remains: given that there’s likely no such thing as a complete authoritative online database of music rights information, is there such a thing as “good enough” for legal purposes? For example: should rights holders be subject to damages limitations if some rights information is beyond their ability to provide it (various such scenarios are possible)? More generally, ASCAP and BMI may claim that what they are doing together is good enough, but the MIC Coalition is going to argue that it isn’t.

As the debates ensue, this question is going to have to be answered, as well as those of scope, incentives, and costs. Yet let’s not forget the old saying: the perfect is the enemy of the good. A freely-accessible online source for rights information would be a great thing even if it doesn’t solve all the world’s problems.

 

 

 

 

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