A Peek at the Congressional Briefing Book on the Music Business

On September 22, the Congressional Research Service (“CRS”) of the Library of Congress, released a report, Copyright Licensing in Music Distribution, Reproduction and Public Performance (the “Report”). The Report states its purpose as follows:

This report provides an overview of the complexities of the Copyright Act’s provisions concerning music licensing. It also discusses four issues involving copyrights in musical works and sound recording that have been the subject of recent congressional and judicial consideration: (1) extending copyright protection to pre-1972 sound recordings; (2) requiring radio broadcasters to compensate recording artists; (3) changing the standard used to calculate royalties for digital music transmissions; and (4) modifying antitrust consent decrees governing songwriter performance royalties.

For those of you unfamiliar with CRS, this is what it does, according to its website:

The Congressional Research Service (CRS) works exclusively for the United States Congress, providing policy and legal analysis to committees and Members of both the House and Senate, regardless of party affiliation. As a legislative branch agency within the Library of Congress, CRS has been a valued and respected resource on Capitol Hill for more than a century.

The CRS defines its mission as follows: “CRS serves the Congress throughout the legislative process by providing comprehensive and reliable legislative research and analysis that are timely, objective, authoritative and confidential, thereby contributing to an informed national legislature.” Accordingly, the Report provides a briefing book for members of Congress – or at least their staffs – on the current statutory and regulatory issues shaping the music industry. So it might be interesting to  know what’s in it.

The 41-page report provides a dense, but useful summary of much of the statutory framework of the current music licensing landscape, including a discussion of recently introduced legislation. If this sounds somewhat familiar, it’s because the Copyright Office traversed this terrain earlier this year in its comprehensive 202-page report, Copyright and the Music Marketplace, and which I summarized here. And of course, the Copyright Office, like the CRS, is also a division of the Library of Congress, although perhaps may change, as the Register of Copyrights has proposed that the Copyright Office leave the Library of Congress and become an independent agency.

In keeping with its stated purpose, the CRS Report (as well as the Copyright Office’s earlier iteration) covers several key issues, including:

• The Justice Department’s ongoing review of the ASCAP and BMI Consent Decrees, including the issue of “partial withdrawal” of works from their respective repertoires;
• The background to the Fair Pay Fair Play Act of 2015, which would mandate that traditional AM/FM radio stations pay public performance royalties on sound recordings, just like their internet streaming counterparts do, as is done in virtually every other country in the world; and
• The Songwriter Equity Act of 2015, which would modify regulatory standards to have all licenses fees set by statute, as  under the ASCAP and BMI Consent Decrees, to be under a “willing buyer / willing seller” standard.

The Report also refers to the Copyright Office’s prior music licensing survey and its various recommendations, but does not contain any of its own.

The CRS Report provides a particularly detailed history of the current statutory framework, including case law and legislative developments, something one would expect in a Congressional briefing memo. However, in attempting to educate Congress about the relevant issues facing the music industry, the Report falls somewhat short in that there is no discussion of the music marketplace as a whole, as opposed to the particular statutory and regulatory scheme currently in place. One might think that putting the various legislative and consent decree proposals in context with the overall music marketplace would be highly relevant to Congressional consideration.

For example, there is no discussion about synchronization or “synch” licenses, which are the permissions required from both the copyright owner of the song (the music publisher(s)) and the copyright owner of the particular recording (the record label) to use a piece of recorded music in film, TV, advertising and other audio-visual uses. This significant portion of the music business is a free market, unregulated by statute or consent decree. Typically, music publishers and record labels command the same fees for synch licenses.

This is in stark contract to license fees for the distribution or downloading of  recordings or the streaming of them over the internet. Both of these areas are regulated and there is a large disparity between the fees labels and artists receive as opposed to those received by publishers and songwriters.   It is critically important that Congress understand the overall music licensing marketplace when considering any change in music licensing policy, including the pending legislation.