DOJ Review of the ASCAP and BMI Consent Decrees - “Fractional Licensing”

The Department of Justice continued it's review of the ASCAP and BMI Consent Decrees by collecting comments on the issue of “fractional licensing” from industry participants. The comments submitted are on the DOJ website, here: http://www.justice.gov/atr/ASCAP-BMI-comments-2015

Not surprisingly, ASCAP, BMI and SESAC, NMPA and other recognized songwriter representatives submitted commetns that were entirely predictable.  The comments rely heavily on arguments that fractional licensing is how the system has "always worked," that not allowing fractional licensing will “wreak havoc” on both the music licensing landscape (and not accordingly, ASCAP and BMI’s businesses) and the creative process. The comments from ASCAp and BMI supporters entirely ignore (or actually making convoluted and/or self-damning arguments regarding) the lack of competition among the PRO’s, from the licensees’ perspective.

Virtually all of the songwriter interest comments acknowledge that, while they operate as though they only license fractionally, none of them have any idea who might own other fractions or what those fractions might be. While they “understand” that their affiliated songwriters enter into contractual arrangements that limit licensing authority, the PROs do not have information on that, don’t ask for it from their songwriters, and suggest it would be very difficult to collect that information.  This is just the latest and greates example of why a musical works database is necessary.

Several licensee-side comments noted that ASCAP and BMI’s own songwriter and publisher affiliation agreements and their Compendium of Rules require that affiliated songwriters and publishers grant complete rights to license public performances, even when the affiliate might only have partial rights.