Judge Rejects “Full Licensing” for Music But Consent Decrees Still Stand

A federal judge has ruled against the U.S. Department of Justice (DOJ) in favor of BMI, one of the largest performing rights organizations (PROs) that administers music licenses, finding that a 1941 antitrust consent decree “neither bars fractional licensing nor requires full-work licensing.” Judge Stanton’s ruling countersDOJ’s recent announcement that full-work licensing is required under the decree. Full-work licensing means that a PRO may only grant rights to a musical work with multiple rights owners when each owner agrees. The PROs argue that the decree allows licensing of the portion of a musical work they represent.

Technically, the judge’s ruling applies only to BMI because it was issued by the court presiding over BMI’s rates. ASCAP’s decree is supervised by a separate court. The consent decrees intend to promote a competitive market and protect against antitrust violations while fairly compensating songwriters and providing efficiency for businesses who use music. DOJ is expected to file an appeal. 

DOJ Decision on ASCAP and BMI

The full-work licensing issue was part of an in-depth DOJ analysis culminating in DOJ’s decision to keep the overall structure for music licensing already in place for ASCAP and BMI. Specifically, DOJ will retain the long-standing antitrust consent decrees that set rates for ASCAP and BMI. Importantly, DOJ upheld the consent decree requirement that licensing fees do not discriminate against similarly situated industries or other consumers who use music.

Subject to certain exceptions and individual circumstances, copyright law may require a license for the right to “perform” or play copyright-protected music in public places, which can include lobbies and other common areas in apartment communities. Together, ASCAP and BMI handle public performance licensing for more than 90 percent of music in the U.S. SESAC, a third PRO, covers about 10 percent of the market.

ASCAP has announced record earnings for general licensing, which includes performance rights for the use of music in businesses like restaurants, bars, hotels and fitness facilities. BMI says it added 15,000 new businesses that pay for public performance rights.

NMHC/NAA members-only guidance provides detailed information and strategies for identifying potential licensing obligations for apartment companies that may use music. We continue to monitor the debate on federal copyright policy as the music industry continues to change.

Provided by NMHC as part of the NAA/NMHC Joint Legislative Program