Although Jeff Sessions hasn’t even been in the Attorney General hot seat for a full month, Big Music’s lobbyists are already starting to knock on his door.
With the change in White House leadership, the music industry, in its push to charge confiscatory and anti-competitive rates for music royalties, is lobbying harder than ever to license songs on a fractional basis.
Having failed for two years to convince the Obama Dept. of Justice to permit fractional licensing, and having failed to gain any traction for legislating it through Congress, the Performance Rights Organizations (PROs) that control the rights to over 90 percent of all music are now pressing Sessions to grant them their wish once and for all.
While Sessions was undergoing his confirmation hearings, the Songwriters of North America tried to capitalize on the change of White House leadership by filing a motion to oppose the Department of Justice’s dismissal of their lawsuit. If successful, they will finally be allowed to license songs on a fractional basis once and for all.
This lawsuit is just the latest in a years-long crusade by the music industry to weaken or scale back the more than 70 year old consent decrees that have kept the music licensing business competitive despite the monopoly status of the few PROs.
There is a reason that their efforts have been so futile thus far. All of the past Republican and Democrat administrations have refused to make Big Music’s dreams a reality because fractional licensing would create complete anarchy in the businesses world. It would allow any copyright owner who holds even the smallest ownership rights to a musical composition to have a voice in the negotiation process, allowing them to hold up the process and exploit purchasers for excessively high royalty rates.
Imagine agreeing to a royalty rate with 98 percent of the copyright owners only to have the process held up, and the rate charged exorbitantly increased, because the owner of the remaining two percent demands a ridiculously high royalty rate. Fractional licensing would allow for just this: it would enrich the IP-abusing copyright holders, and the monopolists that represent them, at the expensive of everyone else involved, including music consumers that would be stuck paying the higher business costs at the cash register.
Attorney General Sessions surely must know that the highly anti-competitive structure that would come from fractional licensing would in no way benefit music consumers and the artists who create and perform for listeners of music. Simply put, fractional licensing is not an idea that is consistent with any conservative vision of how the music licensing industry should operate, because it would throw free market prices to the wayside in order to bolster the power of government-created monopolies.
While there are many regulations on business that are needless and should be eliminated, most can understand that the consent decrees on music licensing protect consumer rights and make this industry far more competitive. This system benefits all of the parties involved, including the PROs who continue to enjoy record billion-dollar revenues from music royalties under the current structure.
Even the most conservative Republican members, including Mike Lee (R-UT), understand that the current whole work licensing system governed by the government consent decrees providers for a competitive music licensing market that is far more effective than any of the alternatives would be. It is necessary to keep the industry competitive and fair for all users.
Attorney General Sessions, as well as Congress, should reject fractional licensing, and make clear the current whole licensing model in practice is what needs to remain in place. It still works well for everyone, and the government doesn’t need to step in on behalf of the musical special interests to “fix” it.