ASCAP Just Proved The Continuing Need For The Consent Decrees

The licensing mega-group’s settlement with the DOJ is proof that the consent decrees are as important and relevant as ever.

By Mike Montgomery

On Friday, the American Society of Composers and Performers agreed to pay the Department of Justice $1.75 million to settle allegations of anticompetitive behavior. Despite the presence of consent decrees that specifically bar ASCAP (and BMI) from interfering with songwriters’ ability to strike direct deals for the licensing of their works, the licensing behemoth was caught red-handed flexing its oversized market muscle to block – not once, not twice, but 150 times – its songwriter and publisher members from licensing their performance rights directly to streaming services.

ASCAP is basically agreeing to do what it was legally required to do all along, but now throwing nearly $2 million down the drain that should instead have been distributed to songwriters.

It would be unbelievable were it not so typical of ASCAP’s consistent bad behavior.

ASCAP (and BMI, which collectively hold the rights to 90 percent of all music licenses) has proven how willing it is to wield its market power to squash competition, which harms songwriters and the prospects of a healthy, modern music marketplace. They trot their members out to Capitol Hill to cry poverty then report record annual royalty revenues of $1 billion – where is all that money going? They claim to have the best interest of their songwriters at heart, but at the same time leverage their enormous market power and comfy relationships with publishers on their Board (a clear conflict of interest that DoJ also is shutting down as a result of the settlement) to prevent songwriters from negotiating direct deals that may actually be in their best interest.

ASCAP’s response to DoJ? They had the audacity to say, “(w)ith these issues resolved, we continue our focus on…key reforms to the laws that govern music creator compensation.”

Why should the government award such behavior by even considering altering the consent decrees? The consent decrees have protected artists and helped enable the rise of music streaming, which is proving to be the most promising new revenue source for artists since the CD came along. Clearly they remain not only relevant, but essential.

Allowing a few big players at the top to use their market power to artificially increase the pricing of music won’t help songwriters. What it will help do is divert revenue opportunities from songwriters, chill innovation and competition, and turn consumers away from legal sources of music.

It doesn’t take a Berklee degree in Music Business to see that this will ultimately lead to a depression, not acceleration, in royalty revenues for songwriters and artists and what’s needed is increased transparency and a continuing adherence to the consent decrees.

Whether ASCAP likes it or not, the consent decrees work. They keep those tempted by untoward acts in-line. If anyone thinks that wouldn’t happen without the consent decrees, they need only to look to ASCAP’s settlement for proof.

Mike Montgomery is executive director of CALinnovates, a technology advocacy coalition.

This piece originally ran in Radio & Television Business Report, and can be viewed here.