As a songwriter and musician, I am disappointed that the Department of Justice is considering removing the monopoly protections that have for decades protected local musicians like me from Big Music’s overreach and abuse.
According to a Feb. 26 Wall Street Journal article, the Justice Department is expected to begin soliciting public comments on whether federal agreements between the two largest music performing rights organizations, known as ASCAP and BMI, which house over 90 public performing rights, should be modified or terminated. This suspected action follows a speech the head of the Antitrust Division head gave last May, which highlighted that the DOJ was looking into the issue.
Why the Justice Department is revisiting this issue when it just finalized a two-year review of their agreements three years ago, in which it decided that they should remain unchanged, is anyone’s guess. While there are certainly far bigger fish to fry at the DOJ, it seems that whenever Big Music cries loudly enough it finds a shoulder to cry on in Washington.
One thing’s for certain, though: what is good for Big Music almost always represents a disaster for everyone else in the industry and removing these DOJ agreements would be of no exception.
These settlements came about in 1941 because of accusations that the two organizations were using their high market share to price gouge, among other anti-competitive practices. The Justice Department understood the benefits of having two companies house the vast majority of performing rights – preventing accounting nightmares for small businesses. However, it also recognized the need to temper the anti-competitive behavior that arose because of the monopolies’ power and influence. As a result, the DOJ decided that both companies could stay intact so long as it implemented rules they agreed to that would prevent future malicious behavior.
The most significant achievement of these DOJ agreements has been their help in promoting local music by introducing the blanket licensing system, which protects fair market pricing and prevents infringement lawsuits by allowing any business to purchase licenses that cover all the songs under ASCAP and BMI’s purview.
The benefits of this system are incalculable. All musicians know the drill: to become noticed and develop a fan base, many performers need to first play covers in small venues, including bars and restaurants. The Black Keys started their career at the Beachland Ballroom & Tavern in Cleveland while The Killersbegan at an open mic night at the Café Espresso Roma in Las Vegas. In the absence of these agreements between ASCAP/BMI and the DOJ, far fewer small businesses would entertain the prospect of promoting local artists because of the higher costs they would incur as a result of their price-gouging of performance licenses. It would amount to a win for big music executives and a net loss for everyone else.
Should the DOJ move forward and sunset or terminate the Big Music agreements, the most troubling aspect would be its ignorance of the alarm bells sounded by congressional leaders – including the chairmen of both the House and Senate Judiciary Committee – of doing so without an alternative framework in place.
Last June, Sens. Chuck Grassley (R-Iowa), Dianne Feinstein (D-Calif.) and Reps. Bob Goodlatte (R-Va.), and Jerrold Nadler (D-N.Y.) sent a letter to the Antitrust Division, expressing concern about the potential for the DOJ to create “serious disruption in the marketplace, harming creators, copyright owners, licensees, and consumers,” without first coming up with a new structure.
Similarly, Sen. Graham, who took over as chairman of the Senate Judiciary Committee this year, sent a letter to the DOJ in February 2019 expressing his concerns about the DOJ potentially disrupting the music industry and his hope that the DOJ will consult with Congress before making any decisions, precisely as the Music Modernization Act stipulates.
The DOJ needs to protect the arts, not limit America’s talent pool by picking winners and losers in the marketplace.
Thankfully, a new sheriff, William Barr, recently took over the Justice Department. His rich experience in Washington and impressive resume, which includes a past stint as U.S. Attorney General under the George H.W. Bush administration, provides hope for increased understanding of this issue and the implications the Justice Department’s ultimate decision can have.
I am optimistic that under Barr’s leadership, the DOJ will, in working with Congress, ultimately come to the right decision, opting to either retain the status quo or come to terms with a workaround that will still prevent Big Music from abusing songwriters, musicians, venues, and the American music industry itself.
In fact, in his confirmation hearing he promised that, “I will work with the Antitrust Division to ensure that this Committee is informed of the Division’s intentions” on the Big Music Agreements “a reasonable time before it takes any action to modify or terminate the decrees.
Hopefully, he will hold to this commitment and take Congress’ input seriously. The local music scene as we know it today will depend on it.
Matt Fitzgibbons is an award-winning songwriter and founder and publisher of PatriotMusic.com
© 2023 Newsmax Finance. All rights reserved.