Music copyrights in the United States are mostly controlled by three organizations ASCAP, BMI and SESAC.
In the beginning was the American Society of Composers, Authors and Publishers. It was formed in 1914, long before radio started in the 1920s. At the time, music was being sold on phonograph records and sheet music printed for live performances.
As ASCAP turned up the pressure on radio stations and artists in the late 1930s, radio launched a boycott of ASCAP, creating BMI (Broadcast Music Incorporated). Radio stations would only play music controlled by BMI. Most artists stuck with ASCAP, leaving BMI signing up mostly unknown music in genres not generally heard on radio up to that point – black gospel, R&B, country, regional music. A for-profit organization in Europe also saw a window of opportunity – The Society of European Stage Authors and Composers (SESAC). SESAC is still a relatively minor competitor in the United States.
In late 1941, with the world on the precipice of another World War, there was an urgency to settle the dispute, and ASCAP and BMI entered in an antitrust “consent decree” with the Department of Justice that established a fair system so that music composers, lyricists and publishers were paid for their work.
Note that the performers of recorded music are not part of the story yet, as it is the publishers that sell the music and pay performers for their performance on negotiated terms, often meaning the performer got nothing.
Under current law, radio stations do not pay performance royalties to the artists, unless they stream music digitally (which now almost all stations do) – that is handled separately by a similar organization called SoundExchange.
In part motivated by artists getting large unexpected checks from $oundexchange (mostly funded by SiriusXM, Spotify and Pandora), many artists are refusing to license their music compositions and performances through BMI, ASCAP or SESAC. The era of Big Radio and Big Record companies colluding to screw the musicians is breaking apart. The pioneer in this fight was Frank Sinatra who refused to allow ASCAP or BMI give his music away for free, a position his estate still holds and enforces.
A new Performance Rights Organiztion – not bound by the 1941 consent decree – is kicking into full gear in January. BMI and ASCAP are non-exclusive – publishers and artists are free to negotiate different rates outside the rates set under the consent decree. Clear Channel started working the edges on this a few years ago, signing with artists who agreed to lower royalties, in exchange for more exposure than they might get otherwise.
Welcome Global Music Rights to the battle. With Congress unwilling to strip the free airplay exception for radio, artists are moving to this new organization that is not subject to the consent decrees and has the objective of maximizing revenue to the artists. Enforcement of those rights against radio will start at the end of January. Radio Stations are compelled to play only artists still available under ASCAP, BMI or SESAC under the statutory license – or negotiate with Global Music Rights with no statutory limit on the rates.
If only a handful of obscure publishers and artists left BMI or ASCAP, this is a hollow threat – but radio is no longer the driver of music sales. Who are the artists that may vanish from radio in a month? I’m not a big music person, but just the first names I recognize:
Adele, Aerosmith, Alice Cooper, Allman Brothers Band, Anthrax, Average White Band, Backstreet Boys, Beyoncé, Billy Idol, Boston, Britney Spears, Carry Underwood, Celine Dione, Cheap Trick, Cindi Lauper, Dan Fogelburg, Diana Ross, Diddy, Duran Duran, Eagles, Elton John, Eric Clapton… More complete list
That list screams “critical mass”. Have I mentioned recently that radio has about $25 billion in debt that aren’t even keeping up with? I wonder why CBS wants out of the radio business, dumping it on IPO suckers…
You might notice there are no Country Music artists in that list. Country Music is waiting in the wings to take over radio airplay. What is old is new again.
Radio has been trying to fight this development in the courts, but caved today and withdrew their request for a restraining order.
They radio industry negotiated only a temporary framework, giving radio stations until the end of September 2017 to negotiate permanent rates.
I noticed on several recent waits on hold on the phone that the phone system was playing random algorithmic music while I was on hold. No composer, no lyrics, no musicians – just robots. That is not unrelated.