Issue in Focus
Mar 13 2015
The cost of music today can vary a great deal, depending on where, how, and by whom it’s being played. The same song can be sold for $2 dollars on iTunes or for $10 on a CD in Starbucks. Or it can be enjoyed at no cost to the listener, whether on the radio, in a restaurant, during a professional sports game, or streamed online through a digital distributor, like Pandora and Spotify.
Yet the underlying value of music is relatively constant. Of course people have different tastes and levels of interest, but music has always been an integral part of our culture and virtually everyone enjoys the experience of listening to good music, however they may define it.
Because of the timeless and inherent value of music, our nation’s copyright laws expressly protect musical works, which means that anyone who wants to perform or play a copyrighted song in public must obtain a license from the song’s author – or else pay enormous damages to the copyright holder.
For more than 100 years, the music licensing market has been dominated by several performing rights organizations (PROs), which represent publishers and songwriters by licensing music on their behalf and then collecting and distributing royalties. Roughly 90 percent of the market is represented by the two largest PROs – ASCAP and BMI – and the price of their music licenses is not determined by market demand but governed by a pair of separate antitrust consent decrees administered by the Department of Justice.
Originally established in the 1940s, these consent decrees have remained largely unchanged for over seventy years, even though there have been dramatic changes in the music industry, including the advent of streaming technology and the rise of new media platforms, like Pandora and Spotify.
As the Justice Department conducts a review of these consent decrees, Congress has a responsibility to evaluate the state of competition in the market for music licenses and to provide an open, public forum for music industry actors to discuss how we can ensure a vibrant, healthy market in which the prices for music remain competitive for consumers.