[Federal Register Volume 90, Number 26 (Monday, February 10, 2025)]
[Notices]
[Pages 9253-9257]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-02418]
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LIBRARY OF CONGRESS
U.S. Copyright Office
[Docket No. 2025-1]
Issues Related to Performing Rights Organizations
AGENCY: U.S. Copyright Office, Library of Congress.
ACTION: Notice of inquiry.
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SUMMARY: The U.S. Copyright Office is collecting information regarding
issues related to performance rights organizations (``PROs'') and the
Copyright Act's public performance right for musical works. It is
initiating this inquiry at Congress's request to gather information on
questions related to the increase in the number of PROs and the
licensing revenue distribution practices of PROs.
DATES: Written comments must be received no later than 11:59 p.m.
[[Page 9254]]
Eastern Time on April 11, 2025. Written reply comments must be received
no later than 11:59 p.m. Eastern Time on May 27, 2025.
ADDRESSES: For reasons of governmental efficiency, the Copyright Office
is using the regulations.gov system for the submission and posting of
public comments in this proceeding. All comments are therefore to be
submitted electronically through regulations.gov. Specific instructions
for submitting comments are available on the Copyright Office's website
at https://copyright.gov/policy/pro-issues/. If electronic comment
submission is not feasible due to lack of access to a computer or the
internet, please contact the Copyright Office using the contact
information below for special instructions.
FOR FURTHER INFORMATION CONTACT: Rhea Efthimiadis, Assistant to the
General Counsel, by email at [email protected] or telephone at 202-
707-8350.
SUPPLEMENTARY INFORMATION:
I. Background
a. Public Performance Right for Musical Works and the Formation of PROs
Musical work copyright owners (e.g., songwriters or music
publishers) have enjoyed the exclusive right to perform their works
publicly since 1897.\1\ The variety of ways those works are performed,
however, has created practical challenges associated with the licensing
of the right. As one court summarized the issue:
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\1\ Act of Jan. 6, 1897, ch. 4, 29 Stat. 481; see also 17 U.S.C.
106(4).
The users of music, such as theaters, dance halls and bars, were
so numerous and widespread, and each performance so fleeting an
occurrence, that no individual copyright owner could negotiate
licenses with users of his music, or detect unauthorized uses. On
the other side of the coin, those who wished to perform compositions
without infringing the copyright were, as a practical matter, unable
to obtain licenses from the owners of the works they wished to
perform.\2\
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\2\ Columbia Broad. Sys., Inc. v. Am. Soc'y of Composers,
Authors and Publishers (``ASCAP''), 400 F. Supp. 737, 741 (S.D.N.Y.
1975), rev'd sub nom. Columbia Broad. Sys., Inc. v. ASCAP, 562 F.2d
130 (2d Cir. 1977), rev'd sub nom. Broad. Music, Inc. (``BMI'') v.
Columbia Broad. Sys., Inc., 441 U.S. 1 (1979); see also Columbia
Broad. Sys., Inc., 441 U.S. at 5 (describing how ``as a practical
matter it was impossible for the many individual copyright owners to
negotiate with and license [the public performance right to] users
and to detect unauthorized uses'' of musical works).
Performing rights organizations (``PROs'') were established to
address these challenges. Broadly, a PRO contracts with songwriters and
publishers for the authority to license the public performance rights
in their musical works, and then provides collective licenses of those
rights to users, allowing them to publicly perform the works in the
PRO's repertoire.\3\ Such licenses are significantly more efficient for
businesses, songwriters, and publishers when compared to song-by-song
licensing and enforcement.\4\
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\3\ See Donald S. Passman, All You Need to Know About the Music
Business 230-31 (11th ed. 2023) (``Passman''); see also Makan
Delrahim, Ass't Att'y Gen., Antitrust Div., U.S. Dep't of Just.,
Statement of the Dep't of Just. on the Closing of the Antitrust
Div.'s Rev. of the ASCAP and BMI Consent Decrees 1 (Jan. 15, 2021)
(``Antitrust 2021 Closing Statement''), http://www.justice.gov/atr/page/file/1355391/dl.
\4\ See U.S. Copyright Office, Copyright and the Music
Marketplace 112 (2015) (``Music Marketplace Report''), https://www.copyright.gov/policy/musiclicensingstudy/copyright-and-the-music-marketplace.pdf.
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b. Evolution of the U.S. PRO Market and Their Competition for Members
After a long period of stability, the number of PROs in the United
States has increased in recent years. The first U.S. PRO was ASCAP,
established in 1914, followed by SESAC in 1931 and BMI in 1939.\5\ More
recently, three new PROs have been formed: Global Music Rights (or
``GMR'') in 2013, PRO Music Rights in 2018, and AllTrack in 2019.\6\
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\5\ Since 1941, ASCAP and BMI have been subject to separate
``consent decrees'' that restrict their licensing practices and
related operations. See id. at 34-42 (discussing consent decrees).
The Office notes that the Department of Justice's Antitrust Division
evaluates and oversees these consent decrees, and antitrust issues
are outside the scope of this Notice of Inquiry.
\6\ See Bruce Pollock, A Friend in the Music Business: The ASCAP
Story 14 (2014) (``Pollock''); BMI, BMI's Timeline Through History,
https://www.bmi.com/about/history (last visited Jan. 22, 2025); GMR,
About Us, https://globalmusicrights.com/about (last visited Jan. 22,
2025); SESAC, About Us, https://www.sesac.com/about/ (noting that
Paul Heinecke founded SESAC in February 1931) (last visited Jan. 22,
2025); Marc Schneider, GMR, About Us, https://globalmusicrights.com/about (last visited Jan. 22, 2025); InsideRadio, Upstart Music
Licensing Company Pro Music Rights Goes Public (July 22, 2022),
https://www.insideradio.com/free/upstart-music-licensing-company-pro-music-rights-goes-public/article_764bb32e-0987-11ed-9d35-ebdda2accc56.html; see also Pollock at 40 (identifying SESAC's
founding as 1930); Jason Lipshutz, SESAC at 80, The Hollywood
Reporter (Apr. 13, 2010), https://www.hollywoodreporter.com/business/business-news/sesac-80-22598/ (noting that ``SESAC was
founded in 1930 as a means of securing American royalties for
European publishers,'' but that ``SESAC quickly expanded to include
American music and began signing songwriters in 1970''). This is not
necessarily an exhaustive list, including because other PROs have
ceased operations. See, e.g., Pollock at 7 (noting that the French
PRO, SACEM, opened a U.S. branch in 1911, but ``failed to generate a
spark of interest''); Robert Israel Goodman, Comment, Music
Copyright Associations and the Antitrust Laws, 25 Ind. L.J. 168, 170
(1950) (referencing former PROs, such as the Society of Jewish
Composers and Israel Composers, Authors, and Publishers, Inc.).
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These organizations compete with each other for songwriter and
publisher members through the license terms and programs they offer.\7\
As the Office has previously recognized, ``[s]ongwriters and publishers
have highlighted the importance of the existence of multiple PROs in
the music marketplace, indicating that they carefully choose the PRO
with which they affiliate based on their perception of which
organization will bring them the most benefit.'' \8\ PROs offer
different royalty rates to their members based on several factors,
including: the number of licensees paying royalties; the rates charged
to those licensees; \9\ the administrative fee charged for the PRO's
services; the PRO's for-profit or not-for-profit status; \10\ and the
methodologies used for
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royalty calculations, which may provide higher payments based on the
relative commercial value of a musical work.\11\
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\7\ Nonmonetary ways by which PROs may compete include their
educational, creative, and promotional offerings, such as showcases,
performance opportunities at festivals and conferences, or panels or
``songwriting awards, professional workshops, hands-on tutorials,
and networking events.'' Pollock at 2; BMI, BMI Member FAQs, https://www.bmi.com/faq/category/about (last visited Jan. 22, 2025)
(discussed under header ``What extra services does BMI offer to
members?''); see also Susan P. Butler, Collective Rights Management
Practices Around the World 20-21 (Apr. 2020), https://www.copyright.gov/policy/unclaimed-royalties/cmo-full-report.pdf
(``Some CMOs [collective rights management organizations, a term
which includes PROs] perform certain educational activities as ways
to compete with other CMOs for members or to provide a better
service to their own members. Some CMOs produce creative conferences
or host songwriter `camps' to share information or promote creative
collaborations.'').
\8\ Letter from U.S. Copyright Office to the Honorable Doug
Collins, Vice-Chairman, Subcommittee on Courts, Intellectual
Property and the internet, United States House of Representatives 26
(Jan. 29, 2016) (``Fractional Licensing Letter''), https://copyright.gov/policy/pro-licensing.pdf.
\9\ See Passman at 230, 235-36 (discussing PROs bargaining power
with licensees); William Livingston, General Manager, Gemeny Winery
and Vineyards LLC, Statement in Response to the Dep't of Just.'s
Request for Public Comments Concerning the ASCAP and BMI Consent
Decrees 1 (June 21, 2019), https://media.justice.gov/vod/atr/ascapbmi2019/pc-300.pdf (noting that ``[a]ll three companies `ASCAP,
BMI and SESAC' give us different rates to pay . . . .''); Ray
Waddell, The $300 Million Comeback: Irving Azoff Teams With MSG's
James Dolan to Create Intriguing Music Company, Billboard (Sept. 6,
2013), https://www.billboard.com/music/music-news/the-300-million-comeback-irving-azoff-teams-with-msgs-james-dolan-to-5687155/
(reflecting that SESAC is able to charge higher rates than ASCAP and
BMI).
\10\ While both ASCAP and BMI were not-for-profit organizations
for many decades, ASCAP is now the only PRO operating on a not-for-
profit basis. ASCAP, ASCAP Annual Report 2023 2 (2024), https://
www.ascap.com/~/media/site-pages/annual-report/2023/2023-ascap-
annual-report.pdf; see also Mike O'Neill, Quarterly Distribution
Update, BMI (Feb. 2023), https://www.bmi.com/distribution/letter/587887 (reflecting BMI's first distribution as a for-profit
business).
\11\ See Passman at 234-35 (noting that PROs ``change their
distribution rules on a regular basis'' and certain performance
bonuses ``also affect the results'' of those distributions); see
also, e.g., ASCAP, ASCAP's Survey and Distribution System: Rules &
Policies (Oct. 2022), https://www.ascap.com/~/media/files/pdf/
members/governing-documents/ascap-survey--distribution-rules--
10322.pdf; BMI, How We Pay Royalties: Live Concert Royalties,
https://www.bmi.com/creators/royalty/live_concert_royalties (last
visited Jan. 22, 2025).
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c. PROs' Licensing Practices
PROs provide licenses for a wide variety of performances, including
``terrestrial, satellite, and internet radio, on-demand music streaming
services, website and television uses, . . . bars, restaurants, and
other commercial establishments, and live performances,'' \12\ as well
as uses by more niche businesses, such as roller rinks \13\ and laser
shows.\14\ They generally offer different license rates depending on
the type of business or use being licensed. ``For example, rates for
restaurants, nightclubs, bars and similar establishments depend on
whether the music is live or recorded, [is] audio only or audio visual,
the number of nights per week music is offered, whether admission is
charged and several other factors.'' \15\
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\12\ Music Marketplace Report at 150.
\13\ ASCAP, ASCAP Music License Agreements and Reporting Forms,
https://www.ascap.com/music-users/licensefinder (listing twenty-six
separate license agreements) (last visited Jan. 22, 2025).
\14\ BMI, Music License Agreements and Reporting Forms, https://www.bmi.com/licensing/forms (listing fifty separate license
agreements) (last visited Jan. 22, 2025).
\15\ BMI, Music Licensing FAQs, https://www.bmi.com/licensing/faqs (click on ``Q: How much is a BMI music license and how is that
fee determined?'') (last visited Jan. 22, 2025).
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A standard practice for PROs is to offer licenses on a non-
exclusive basis, which means that businesses have the option of
obtaining performance licenses directly from publisher or songwriter
copyright owners, although it appears that instances of such direct
licensing has been infrequent.\16\ Most licensees that contract with
PROs obtain a blanket license \17\ to all works, or shares of works, in
the PRO's repertoire.\18\ The royalty fee charged is ``ordinarily a
percentage of . . . [the licensee's] revenues or a flat dollar
amount.'' \19\
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\16\ See BMI v. Pandora Media, Inc., 140 F. Supp. 3d 267, 275
(S.D.N.Y. 2015).
\17\ Music Marketplace Report at 33. PROs may offer other
license types, including per-program or per-segment licenses. Id.
\18\ A PRO's ``repertoire'' or ``repertory'' is sometimes called
its ``catalog.'' See GMR, Catalog Homepage, https://globalmusicrights.com/Catalog (last visited Jan. 22, 2025).
\19\ Columbia Broad. Sys., Inc., 441 U.S. at 5; United States v.
ASCAP, 627 F.3d 64, 68 (2d Cir. 2010) (``A blanket license is a
license that gives the licensee the right to perform all of the
works in the repertory for a single stated fee that does not vary
depending on how much music from the repertory the licensee actually
uses.'').
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As previously described by the Office, ``the practice of licensing
only partial interests in co-owned works'' is called ``fractional''
licensing and stands in contrast to ``100-percent'' licensing, which
entails ``granting full rights to use a co-owned work based upon a
partial interest in the work.'' \20\ Because musical works are
frequently created by multiple authors (i.e., songwriters, including
composers and lyricists),\21\ co-ownership issues can play an important
role when licensing musical works. Depending on the circumstances of
their creation, musical works with multiple authors may be considered
joint works.\22\ While the default rule is that joint authors own equal
and undivided interests in a copyright-protected work,\23\ musical work
joint authors often agree to alter that rule, including to instead
divide the ownership shares unequally and to permit separate licensing
of those shares.\24\
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\20\ Fractional Licensing Letter at 1-2.
\21\ As the Office has previously reported, in addition to
multiple songwriters who may work on a single work, a ``song may
incorporate samples of, or remix, preexisting works'' owned by
additional copyright owners. Id. at 8-9.
\22\ See id. at 4-8. In some circumstances, the work may be
considered a derivative work or compilation. Id.
\23\ 17 U.S.C. 201(a) (``The authors of a joint work are
coowners of copyright in the work.''); see also Fractional Licensing
Letter at 6-7 (discussing this topic further).
\24\ Fractional Licensing Letter at 9. When signing a standard
publishing contract, a songwriter will ``assign[ ] the entirety of
his or her copyright interest in a composition or catalog of
compositions to a publisher in exchange for the publisher's
administrative services and a share of revenues,'' but the
songwriter will retain the ability to collect his or her share of
royalties directly from their chosen PRO. Id. at 11.
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Fractional licensing is often cited by licensees as a cause of
administrative frustration and increased costs.\25\ For example, if a
musical work has multiple songwriters and publishers who have
authorized different PROs to license their separate fractional
interests, then any PRO's ability to offer a license is limited to the
fractional interests that the PRO has obtained.\26\ In that case, the
entity that intends to publicly perform a particular musical work must
confirm that it has obtained a license for all of the fractional
interests in the work, which may require licenses from multiple
PROs.\27\ Otherwise, that user ``may face infringement liability'' for
publicly performing the work.\28\
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\25\ See, e.g., Brief of Television Music License Committee as
Amici Curiae Supporting Appellant at 28, United States v. BMI, 720
F. App'x 14 (2d Cir. 2017) (No. 16-3830) (suggesting that fractional
licensing would be ``costly'' and ``time consuming'' for local
broadcasters); Brief for Consumer Action and Public Knowledge as
Amici Curiae Supporting Appellant at 3, United States v. BMI, 720 F.
App'x 14 (2d Cir. 2017) (No. 16-3830) (stating that fractional
licensing makes it ``harder and more expensive for music services to
license songs'').
\26\ See Fractional Licensing Letter at 10-15.
\27\ United States v. BMI, 207 F. Supp. 3d 374, 375 (S.D.N.Y.
2016), aff'd, 720 F. App'x 14 (2d Cir. 2017) (summary order) (``a
music user, before performing any multi-owner work in a PRO's
repertory, would need a license to [all] the fractional interests
held by each of the work's co-owners'').
\28\ Fractional Licensing Letter at 9; see also Columbia Broad.
Sys., Inc., 441 U.S. at 18 (``Those who would use copyrighted music
in public performances must secure consent from the copyright owner
or be liable at least for the statutory damages for each
infringement and, if the conduct is willful and for the purpose of
financial gain, to criminal penalties.'').
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While the practice of fractional licensing has caused frustrations
for some licensees, it has encouraged competition among the different
PROs for songwriters and publishers.\29\ The Office previously noted
that if PROs were forced to offer 100-percent licenses, doing so
``would seemingly vitiate important principles of copyright law,
interfere with creative collaborations among songwriters, negate
private contracts, . . . impermissibly expand the reach of the consent
decrees,'' and ``could also severely undermine the efficacy of [PROs]''
and their ability to ``grant blanket licenses.'' \30\
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\29\ Fractional Licensing Letter 19, 23-25.
\30\ Id. at 3, 13.
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Information regarding what works are covered by a PRO's blanket
license is not always publicly available. The largest U.S. PROs do
publicly disclose the works in their respective repertoires.\31\ For
example, in 2020, ASCAP and BMI debuted ``SONGVIEW,'' an online ``joint
song data platform,'' that ``reconcile[s] songwriter and publisher
information'' between those two PROs.\32\ If a musical
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work's rights are not fully licensed by ASCAP and BMI, SONGVIEW will
indicate what percentage of rights are outside the control of these two
PROs and may also indicate which other PROs control the remaining
rights.\33\ Two other PROs, SESAC and GMR, provide web pages dedicated
to their respective repertoires along with the option to acquire their
repertoire information in bulk.\34\
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\31\ See ASCAP, ASCAP Repertory Search, https://www.ascap.com/repertory (last visited Jan. 22, 2025); BMI, SONGVIEW, https://repertoire.bmi.com/ (last visited Jan. 22, 2025); SESAC, Search
Repertory, https://www.sesac.com/repertory/ (last visited Jan. 22,
2025) (including a link to download SESAC's entire repertory); GMR,
Catalog Homepage, https://globalmusicrights.com/Catalog (last
visited Jan. 22, 2025); see also GMR, Request Full Catalog, https://globalmusicrights.com/CatalogRequest (last visited Jan. 22, 2025).
\32\ Ed Christman, Who Owns That Song? ASCAP & BMI's New Joint
Data Platform Will Tell You, Billboard (Dec. 21, 2020), https://www.billboard.com/pro/ascap-bmi-joint-database-songview/.
\33\ See Inside Radio, ASCAP, BMI Launch Music Data Platform
With Copyright Info For Millions of Songs (Dec. 21, 2020), https://www.insideradio.com/free/ascap-bmi-launch-music-data-platform-with-copyright-info-for-millions-of-songs/article_b3e0b200-43ab-11eb-ba27-13dee78eb249.html (``[I]f a song is reconciled in Songview
between ASCAP and BMI and there are shares from another PRO involved
in the work, such as SESAC or GMR, then the system will list those
shares as `Other' or will reflect that the ASCAP and BMI shares
don't add up to 100%. In addition, writer affiliations are displayed
and there is also an indication that there are non-ASCAP and BMI
publishers involved with that work.'').
\34\ SESAC, Search Repertory, https://www.sesac.com/repertory/
(last visited Jan. 22, 2025) (including a link to download SESAC's
entire repertory); GMR, Catalog Homepage, https://globalmusicrights.com/Catalog (last visited Jan. 22, 2025); GMR,
Request Full Catalog, https://globalmusicrights.com/CatalogRequest
(last visited Jan. 22, 2025).
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Nevertheless, the information in these databases and websites may
include inaccuracies as a result of changes in the PRO's membership
\35\ and the fact that some data is provided by third parties,
including songwriters and publishers.\36\ The largest U.S. PROs
disclose this fact, disclaiming any guarantees or warranties.\37\ At
the same time, some PROs represent that they will not bring litigation
against those relying in good faith on their publicly available
repertoire data.\38\
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\35\ Songwriters can leave ASCAP and BMI every two years. ASCAP,
Compendium of ASCAP Rules and Regulations, and Policies Supplemental
to the Articles of Association sec. 1.11.1 (Aug. 14, 2023), https://
www.ascap.com/~/media/files/pdf/members/governing-documents/ascap-
compendium.pdf; BMI, Affiliation Agreement Info, https://www.bmi.com/creators/agreement (last visited Jan. 22, 2025).
\36\ See, e.g., ASCAP, ASCAP Repertory Search--Terms of Use
Agreement, https://www.ascap.com/help/legal/ace-terms-of-use (noting
that ``information contained in ASCAP Repertory Search has been
supplied to ASCAP, and is aggregated from, a variety of third party
sources'') (last visited Jan. 22, 2025).
\37\ Id. (noting that information in ASCAP's database ``changes
on a continual basis, and as with any information database, there
may be inaccuracies or delays in updating the information'' and
including a disclaimer related to use of its database); BMI,
Disclaimer, https://repertoire.bmi.com/Main/DisclaimerOnly (``BMI
has high confidence in the accuracy of the data we provide, which is
obtained from rights holders who, as royalty recipients, have every
incentive to provide reliable data,'' though ``BMI cannot give a
blanket guarantee regarding the accuracy of the data . . . .'')
(last visited Jan. 22, 2025); BMI, Terms and Conditions of Use,
https://www.bmi.com/legal/entry/terms_and_conditions_of_use (noting
that ``[t]he information contained in the BMI Searchable Song Title
Databases have been provided to BMI from a variety of sources, and
BMI makes no warranties or representations whatsoever with respect
to the accuracy or completeness of the information in the BMI
Searchable Song Title Databases other than to determine what musical
compositions are licensed by BMI through the last update'' and ``BMI
does not warrant or represent that any BMI content that you may
access at or through a BMI site or service is current, accurate or
complete'') (last visited Jan. 22, 2025); SESAC, Search Repertory,
https://www.sesac.com/repertory/ (``As search results will contain
information provided to SESAC by the songwriters and publishers that
SESAC represents, SESAC makes no representations and/or warranties
with respect to the accuracy or completeness of the information
found within the search results, though SESAC has no reason to
believe that the information found within the search results is
inaccurate or incomplete.'' (text displayed in a pop-up window))
(last visited Jan. 22, 2025); GMR, Terms of Use, https://globalmusicrights.com/TermsOfUse (``The information contained in the
[GMR] Database changes on a continual basis, and as with any
information database, there may be inaccuracies or delays in
updating the information. Although [GMR] uses reasonable efforts to
update the [GMR] Database and improve the accuracy of the
information contained therein, [GMR] makes no guarantees, warranties
or representations of any kind with regard to and cannot ensure the
accuracy, completeness, timeliness, quality or reliability of any
information made available on and through the [GMR] Database.'')
(last visited Jan. 22, 2025).
\38\ BMI, Disclaimer, https://repertoire.bmi.com/Main/DisclaimerOnly (``Businesses that take out a BMI license can be
assured that BMI will not bring an infringement action against a
licensee that relies on the information contained in the data
platform. . . . Additionally, BMI will not sue an individual or
business for infringement for the performance of music in which BMI
has an interest if, when that music is performed, it was not listed
in the data platform.'') (last visited Jan. 22, 2025); GMR, Request
Full Catalog, https://globalmusicrights.com/CatalogRequest (``Global
Music Rights will not sue anyone for copyright infringement for
performances of these compositions unless they appear in this
catalog at the time of performance.'') (last visited Jan. 22, 2025);
SESAC, Search Repertory, https://www.sesac.com/repertory/ (``SESAC
uses reasonable efforts to keep the information contained in its
repertory database current and will grant Users of this Repertory
Search a forty-five (45) day grace period beginning upon the date
that a musical work is first posted to SESAC's repertory database to
obtain from SESAC a license covering the use of that musical work,
during which forty-five (45) day period SESAC will make no claims of
copyright infringement against the User; provided, however, that the
User has acted in good faith and was unaware that the musical work
is contained within SESAC's repertory.'') (text displayed in a pop-
up window)) (last visited Jan. 22, 2025).
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d. PROs' Usage Tracking and Royalty Distribution Practices
To accurately distribute royalties, PROs must track the musical
works performed by their licensees. This may be based on licensee- or
artist-based reporting (including by providing playlists, program
guides, cue sheets, or setlists).\39\ It also may involve the PRO's
monitoring of performances on certain mediums, such as on broadcast or
cable television or terrestrial or satellite radio.\40\
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\39\ See, e.g., Bob Kohn, Kohn on Music Licensing 1241-42 (5th
ed. 2019); Passman at 232-34; ASCAP, ASCAP Payment System:
Identifying Performances, https://www.ascap.com/help/royalties-and-payment/payment/identifying (last visited Jan. 22, 2025).
\40\ See Passman at 233-34.
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In certain circumstances, accurate usage data may be unavailable or
economically inefficient to obtain. PROs may then rely on proxy data to
estimate usage.\41\ This proxy data may come from a census (where a
``complete count[ ] of performances in a medium'' has been made) or
sample surveys (where the PRO ``tak[es] a representative cross-section
of the performances on [a] medium'').\42\
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\41\ Id. at 233; BMI, How We Pay Royalties, https://www.bmi.com/creators/royalty/general_information (``[I]n cases where performance
data is not available or is incomplete for any of the sources from
which BMI collects fees, BMI may distribute those fees against
performances from a source or sources where sufficient data is
available.) (last visited Jan. 22, 2025).
\42\ ASCAP, Royalties and Payment: Frequently Asked Questions,
https://www.ascap.com/help/royalties-and-payment (last visited Jan.
22, 2025).
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In addition to the number of times a musical work has been
performed, other factors affect the royalties that a PRO distributes to
its members. As noted above, a PRO may charge different rates based on
the category of use (e.g., terrestrial and satellite radio, television,
cable, audiovisual streaming services, audio streaming services,
concert venues, etc.).\43\ Additional distinctions may be made within
any of these categories of uses, e.g., the royalty for musical works
performed on a television program may depend on whether the use was on
local or network television or used as a featured performance, theme
song, or background music (or underscore).\44\ In some circumstances,
PROs may also distribute royalty bonuses for hit songs or popular
standards.\45\
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\43\ See generally, ASCAP, ASCAP's Survey and Distribution
System: Rules & Policies (Oct. 2022), https://www.ascap.com/~/media/
files/pdf/members/governing-documents/ascap-survey--distribution-
rules--10322.pdf.
\44\ Jeffery Brabec & Todd Brabec, Music, Money, and Success:
The Insider's Guide to Making Money in the Music Business 388-91,
397-400 (8th ed. 2018) (``Brabec'') (providing an overview of
television royalty payment formulas for ASCAP and BMI).
\45\ Id. at 357; see also Passman at 234 (reflecting that PROs
may pay bonuses for popular songs).
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With respect to live performances at larger venues, some PROs have
historically only paid royalties for those musical works performed at
the top-grossing tours and festivals.\46\ For
[[Page 9257]]
smaller venues, some PROs allow performers to self-report performance
data, which is used by the PROs to calculate royalty distributions.\47\
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\46\ Brabec at 394 (noting that ``ASCAP conducts a census survey
(100% pickup) of all songs performed in the 300 largest concert
tours and festivals in the United States, as well as all songs at a
dozen or so selected venues . . . .''); Passman at 234 (``The
societies pay based on domestic concert performances, but it's only
for the top three hundred grossing tours and festivals . . . .'');
see also Jeffery Brabec & Todd Brabec, Music, Money, and Success:
The Insider's Guide to Making Money in the Music Business 339 (7th
ed. 2011) (noting that the census survey was formerly of the ``top
200'' tours and ``eleven major venues'').
\47\ Brabec at 394 (referencing ASCAP's OnStage program); see
also BMI, Get Paid for Live Performances with BMI Live, https://www.bmi.com/special/bmi_live (last visited Jan. 22, 2025).
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PROs have created royalty calculation and distribution policies to
account for all the elements they consider when paying their
members.\48\ While some may publish aspects of these policies,
information regarding any individual PRO's financial operations,
including license and royalty distribution terms, may not be publicly
available for competitive reasons.
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\48\ See, e.g., ASCAP, ASCAP's Survey and Distribution System:
Rules & Policies (Oct. 2022), https://www.ascap.com/~/media/files/
pdf/members/governing-documents/ascap-survey--distribution-rules--
10322.pdf; BMI, Royalty Information, https://www.bmi.com/creators#royaltyinformation (providing higher-level royalty
calculation information) (last visited Jan. 22, 2025).
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II. Congressional Request and Subjects of Inquiry
In September 2024, the Copyright Office received a letter from
three members of the House Judiciary Committee relaying concerns over
(1) the increase of PROs and (2) difficulties regarding how to ``assess
how efficiently PROs are distributing general licensing revenue, based
on publicly available data.'' \49\ The term ```[g]eneral licensee' is
an umbrella term referring to the hundreds of thousands of bars,
restaurants, hotels, ice and roller skating rinks, theme parks and
other `brick and mortar' businesses . . . that are not TV, radio or
audio and audio-visual streaming platforms.'' \50\ The letter asked the
Office to gather information regarding these issues. With this notice,
the Office is soliciting input to aid Congress's consideration of these
issues and invites written comments on the subjects of inquiry below.
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\49\ Letter from Reps. Jordan, Issa, and Fitzgerald to Shira
Perlmutter, Register of Copyrights, U.S. Copyright Office at 1-2
(Sept. 11, 2024) (``Congressional Request''), https://www.copyright.gov/policy/pro-issues/letter-to-usco-pro-issues.pdf.
\50\ ASCAP, Why ASCAP Licenses Bars, Restaurants & Music Venues,
https://www.ascap.com/help/ascap-licensing/why-ascap-licenses-bars-restaurants-music-venues (last visited Jan. 22, 2025).
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A. The Increase in PROs
The Congressional Request states that bars, restaurants, stores,
hotels, and music venues engaged in the public performance of musical
works ``have reported receiving demands for royalties from new entities
claiming to represent songwriters, and threatening litigation if the
demands are not met.'' \51\ It adds that, ``[c]onsidering that the
possibility of substantial statutory copyright damages poses an
existential risk for most bars, restaurants, and other small
businesses, many feel compelled to pay these entities on top of what
they already pay for blanket licenses from the traditional PROs.'' \52\
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\51\ Congressional Request at 1-2.
\52\ Id. at 2.
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The Office is requesting public comment on the following topics:
1. To what extent, if any, have there been increased financial and
administrative costs imposed on licensees associated with paying
royalties to additional PROs;
2. Factors that may be contributing to the formation of new PROs;
and
3. Recommendations on how to improve clarity and certainty for
entities seeking to obtain licenses from PROs to publicly perform
musical works.
B. General Licensing Revenue Distribution Methods
With respect to concerns regarding revenue distribution, the
Congressional Request states that ``it is difficult to assess how
efficiently PROs are distributing general licensing revenue based on
publicly available data,'' including ``how accurately lesser known and
independent artists as well as smaller publishers are being compensated
compared to widely popular artists and major publishers.'' \53\
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\53\ Id.
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The Office is requesting public comment on the following topics:
4. How PROs currently gather information concerning musical works
publicly performed at live music venues, on music services (e.g.,
digital music providers), and by other general licensees (including
bars, restaurants, stores, hotels, and similar venues);
5. Whether the manner in which the PROs gather information
regarding public performances adversely impacts lesser-known artists
and smaller publishers;
6. What information PROs currently provide to the public, including
with respect to:
(a) repertoire information and metadata (e.g., song titles,
songwriter and publisher information, ownership shares, and unique
identifiers); and
(b) royalty distribution practices and policies;
7. Whether any gaps or discrepancies occur in royalty
distributions, including circumstances where it is likely for
performance data to be unavailable or incomplete and where PROs must
rely on proxy or survey data for royalty distributions;
8. What technological and business practices exist or could be
developed to improve the current systems for usage tracking and royalty
distribution;
9. The extent to which current PRO royalty distribution practices
are the result of existing legal and regulatory constraints; and
10. Additional recommendations for Congress to address these
issues.
Dated: February 5, 2025.
Suzanne V. Wilson,
General Counsel and Associate Register of Copyrights.
[FR Doc. 2025-02418 Filed 2-7-25; 8:45 am]
BILLING CODE 1410-30-P