In a notice today, the US Justice Department said that it would be reviewing decades-old accords that has governed songwriter royalties. According to the federal agency, the review will be examining the operation and the effectiveness of the consent decrees dated as far back as 1941 with the American Society of Composers, Authors and Publishers and Broadcast Music Inc. The New York-based Ascap and BMI, who has been arguing with Pandora Media Inc, represents hundreds of thousands of songwriters, composers and publishers.
The Justice Department said in the notice, "The department understands that Ascap, BMI and some other firms in the music industry believe that the consent decrees need to be modified to account for changes in how music is delivered to and experienced by listeners."
Bloomberg said that the impending review follows the recent court battles that has been ranging between Internet radio firm Pandora and rights holders. The review would reportedly affect how Pandora, who has been leading in the Internet radio market, pays its songwriters every time their songs are being played. Ascap and BMI insisted in court disputes that the accords it has reached with the Justice Department do not take into account the rise of digital media.
Pandora spokesman Dave Grimaldi argued to Bloomberg that the decrees with the US government provide important protections for broadcasters and songwriters, which included processes on the establishment of a reasonable royalty rate if both parties could not agree on one.
"The consent decrees help foster innovation and competition by enabling new industry entrants," said Grimaldi.
Bloomberg said songwriters, publishers and the groups that represent them have been seeking higher than usual royalties for public performances from broadcasters coincidentally at the time when recorded music sales have declined. Ascap reportedly distributed $851.2 million to its members last year, while BMI shelled out $814 million in fiscal 2013.
BMI sued Pandora in June last year over claims that the Internet radio company offered a blanket royalty rate supposedly reasonable for the group. The news agency said that the case is currently pending in court. Ascap, on the other hand, has requested an increase in royalty rates from 2011 to 2015 despite the fact that a Manhattan federal judge approved a 1.85% of revenue royalty rate to the group in March.
