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DOJ SAYS 'NO' TO CONSENT DECREE CHANGES (UPDATE)

Music publishers have been thwarted a Department of Justice decision. The DOJ has decided to not alter the consent decree for ASCAP and BMI as it pertains to digital licensing, and the two PROs cannot do fractionalized licensing.

The second ruling means any song with multiple rights holders represented by different PROs can be OK’d by one rights owner without the consent of the other(s). The ruling will most likely affect the amount songwriters make from their work, and could lead to songwriters collaborating only with members of their PRO to ease operations on the business side.

“We are incredibly disappointed by the unjust way the Department has decided to interpret the consent decrees,” Marty Bandier, Chairman and CEO of Sony/ATV Music Publishing, said. “Its decision is going to cause a tremendous amount of uncertainty and chaos in a market place that has worked well for years and will adversely impact everyone in the licensing process, including PROs, licensees, music publishers and most of all songwriters who can ill afford to hire lawyers to figure out their rights under this inexplicable ruling. The decision raises more questions than answers.”

ASCAP and BMI had argued that changes were required to deal with online streaming of music, which has cut deeply into songwriters’ income.

The New York Times reported that BMI CEO Mike O’Neill sent his employees a memo today that noted “We are surprised that the D.O.J. feels it needs to restructure a world that is efficient into one that we believe won’t be.”

The question now is whether ASCAP and BMI will fight the rulings. As important as the DOJ rulings are, ASCAP and BMI rate-court judges still have to approve any changes to the consent decree, which has been in place since 1941. That could have further consequences though: Universal Music Publishing Group and Sony/ATV have said leaving ASCAP and BMI is a possibility if there are no changes to the consent decrees. Supermogul Irving Azoff, meanwhile, has referred to the decrees as "deplorable."

The two Performing Rights Organizations said they would evaluate the information they were given and will respond soon to the DOJ, which based its decision on two years worth of study, according to the Times.

Digital services—which stand to be the big winners in these decisions—and major publishers are expected to meet soon with the DOJ. The PROs, quite naturally, hope the publishers will explain the perils of so-called “100% licensing,” from creating new infrastructures to its potentially chilling effect on collaborations.

The PROs, too, could see publishers and songwriters taking their business elsewhere to the PROs not covered by the consent decree, such as SESAC and Global Music Rights.

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