Broadcasters Sue BMI For Expanded Direct Licensing, Lower License Fees and Access to Cue Sheets
The owners of approximately 1,200 local television stations, citing a “massive reduction” in audience size, have sued performing rights society BMI in rate court, asking the Court to set “reasonable fees and terms” for the use of BMI music in television programming including terrestrial and digital platforms, grant broadcasters access to cue sheets, and add a provision to the blanket license that essentially creates a credit for each performance of a musical work that is directly licensed with a composer or publisher. The terms of the new blanket license credit, if approved, are likely to be decided by a judge in a case brought by BMI against DMX, a commercial background music company.
Click to download: Broadcaster Suit Against BMI (petition) | BMI Suit Against DMX (petition)
When a music performance is direct licensed, a deal is struck between the broadcaster and the copyright owner of the music that represents a direct payment for performance royalties, and those performances no longer are licensed through the performing rights organizations. These direct payments can take the form of a single lump-sum buyout of the performing right or a series of payments that are paid as long as the program is broadcast.
The creation of a widely available broadcaster direct licensing credit for individual works has the potential to profoundly affect how composers and songwriters are paid for public performances, as many more broadcasters could be in a position to realize significant cost savings by direct licensing the performance right directly from composers or as part of the composer’s agreement with a production company.
The resulting shift of the performing right licensing process away from royalty societies and into individual, private deals with production companies, music libraries and composers could create major changes in how composers and songwriters are paid performance royalties for their music as private negotiations by individual copyright owners replace collective representation by the performing rights societies. For example, production companies that own copyright as a result of composer work-for-hire agreements could be paid a direct license fee by one or more broadcasters for score music they own. What portion of those direct license fees would be payable to composers depends entirely on the individual composer’s agreement with the production company.
Music libraries could also find themselves in the position of being potential middlemen in negotiations for direct license payments with production companies, leaving composers dependent on whatever language may be in their agreements with music libraries to determine what portion of direct license fees, if any, is paid to the composer. So-called “retitling” libraries who do not own copyright may represent a better option for composers in this situation, since they do not own copyright and cannot grant a direct license unless their contract specifically gives them the ability to do so.
Currently, only broadcasters on a per-program license can realize a direct licensing deduction from a performing rights society (PRO), and only on a per-show basis if the entire show is free of music represented by that PRO. The per-program license requires substantially more broadcaster reporting requirements and is priced higher than a blanket license.