Category: CMO rules

Direct deals by consolidated music publishers are de facto anticompetitive, lacking in transparency and potentially harmful for songwriters. At the recent round of music licensing hearings before Congress, BMI addressed the issue of “interim licensing.” Both ASCAP and BMI have the ability to negotiate interim fees. While FMC acknowledges that the addition of interim licensing may be an equitable solution, any modification regarding interim licensing or fees must preserve direct payments to songwriters, the 50/50 splits, and promote greater transparency for the benefit of songwriters who require accurate royalty statements and services seeking clarity on what repertoire is available to perform. FMC, however, also acknowledges that interim licensing could shift the “holdout” problem, demotivating PROs to come to reasonable fee agreements. Combined with the proposals for mandatory arbitration, interim licensing could potentially leave songwriters and end-users in a dead-zone without any recourse, stuck with payments under new interim licenses and lacking any bargaining power to arrive at reasonable licensing through an equitable or meaningful grievance mechanism.