WASHINGTON (May 5, 2016) – Debate over how best to reform the United States’ music licensing system has increased, following the Department of Justice’s recent inquiry into the consent decrees that govern the nation’s two largest performance-rights organizations (PROs), which oversee how copyrighted music is licensed to bars, restaurants, and other businesses. A new policy study from R Street’s director of innovation policy, Mike Godwin, notes that the latest attempts to find common ground between PROs and music publishers have produced no perfect solution.

Among the most notorious licensing problems is the difficulty of determining with certainty whether all rights holders have been properly consulted before a license is granted. Proposed solutions to this issue — including “100 percent licensing,” in which PROs are able to license 100 percent of compositions despite not owning 100 percent of the rights to the work – could address many common complaints, while also creating new shortfalls of their own.

Perhaps the most reasonable middle-ground has come from Congress’ latest attempts to simplify the Copyright Act of 1976.

“The act sets out a ‘tenancy in common’ interest, in which each partial rights-holder has some ability to license 100 percent of the work in question, liable to other rights-holders for an ‘accounting’—that is, a proportional payment on the assumption that each rights-holder gets an equal share,” writes Godwin. “For example, a song written by two co-authors would see each assume a 50-50 share of the licensing revenues that one co-author might have negotiated; revenues from a song with four co-authors would be split with 25 percent going to each, and so on.”

Ultimately, making the American music licensing system more efficient is a complex task best handled by Congress, rather than the DOJ, the Copyright Office, or the federal courts.

Godwin concludes, “It’s Congress, which is directly responsible not only to all the music-industry stakeholders but also to the general public, that not only can fully ‘understand what we’re doing’ but also can achieve ‘the right answer’ through its own express power to create and alter our copyright system.”

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