Weekly Column: Bringing Fairness to Music Licensing
WASHINGTON, D.C. – Today Congressman Sensenbrenner released his weekly column regarding intellectual property rights and fairness in music licensing:
Intellectual property rights are critical to our nation’s unsurpassed creativity and cultural development. I’ve long been an advocate for intellectual property rights because individuals deserve to be compensated for their work. However, the process in which artists receive payment has become opaque. This is largely due to performing rights organizations (PROs), which operate in a complex manner. The music licensing system in which artists are compensated must be clear and transparent for the good of artists, consumers, and bar and restaurant owners.
Fairness in music licensing was brought to my attention in the early 1990s, when bar and restaurant owners from the Fifth District contacted me about being harassed in their places of business by representatives from the American Society of Composers, Authors and Publishers (ASCAP) — one of the three PROs in the U.S. While seeking payments from the small-business owners, ASCAP representatives were unnecessarily aggressive and combative.
Bar and restaurant owners frequently complained that these organizations exploited bureaucratic complexities to demand increasingly high payments. Worse, small businesses were often unclear about what exactly they were paying for. I became involved to enact meaningful reforms, and as I dove deeper into the complexities of the issue, the extent of the problems became clear. The Copyright Act of 1976 granted copyright owners the exclusive right to perform, or to authorize others to perform their works publicly. When establishments, such as restaurants or bars, turn on a radio or television for the benefit of customers, or feature live music, that constitutes a public performance of copyrighted works under current law. Unless an exemption applies, the copyright owner of a work publicly performed has the right to receive compensation.
To comply with the law, business owners pay licensing fees to PROs. However, each PRO represents different intellectual property, essentially forcing businesses to pay fees to every PRO to ensure compliance.
In response to this problem, I introduced the Fairness in Music Licensing Act. Despite strong opposition from PROs, the legislation was signed into law after having been attached as an amendment to the Copyright Term Extension Act.
Studies have concluded that the act exempts roughly 70 percent of eating and drinking establishments, making it easier for small-business owners to operate and serve consumers. The Copyright Act of 1976 has helped; yet problems still exist, including the tactics used by PROs and the method in which they determine which spaces within small businesses are determined public or private — an important distinction when considering where music licensing is necessary.
Establishment owners should not be forced to conduct business with every licensing society demanding a fee. There needs to be transparency in how establishments are billed, and we need to ensure that when a business pays a music licensing fee, it knows what it is buying. There can be no fair long-term marketplace outcomes when the playing field is weighted in favor of performance rights groups.
Music, film, literature and all other forms of intellectual property represent the soul of the American people. It’s vital we protect them, but there needs to be balance and fairness in the process. When that balance is lopsided, it’s the duty of Congress to take legislative action to ensure it is restored for the benefit of both the creators and consumers of intellectual property.