Revamping Consent Decrees

Vampire Weekend is back. And for every pretentious twenty-something who likes alluding to Brideshead Revisited and sleeping with a copy of In Search of Lost Time, that sonorous blessing carries all the weight and memory of Proust’s madeleine. But the band’s first release after a six-year hiatus will enter a different music environment than before: Recent reforms to policies governing the music industry have just passed through Congress and are being considered by the Department of Justice (DOJ). Music regulation may not be sexy, but these reforms could have a huge effect on how we stream and consume music. Though US policymakers are often criticized for their sluggish response to hefty issues such as climate change and immigration, it’s important to recognize the meaningful work the government is putting into smaller yet still-impactful areas—in this case, music regulation.

Currently, the music industry is consumed by duopolies and triopolies: Spotify and Apple Music for consumption; Live Nation and its baby competitor AEG for live event ticketing; and Sony, Universal, and Warner for publishing. But perhaps the most influential of the musical duopolies is in licensing, between the two main Performance Rights Organizations (PROs): the American Society of Composers, Authors and Publishers (ASCAP) and Broadcast Music Inc. (BMI).

It’s important to recognize just how powerful these two licensing powerhouses are. Every track produced in the United States is subject to two distinct copyrights: one for recording and one for composition. Each of these copyrights is owned by multiple parties, so it would be a logistical nightmare if everyone who wanted to play different tracks had to negotiate with each individual copyright owner. Enter the PROs. These companies sell music in blanket licensing agreements, which give restaurants, coffee shops, and everyone who wants to play music legal access to many different songs without the struggle of negotiating individually.

Unfortunately, this setup naturally leads to an anti-competitive market. Whoever owns the largest number of songs can offer the largest blanket license and thus is also the most rational choice for consumers. Imagine if one PRO only had access to Contra, but another one had access to all three—soon to be four—of Vampire Weekend’s spectacular albums. One would obviously pick the PRO that lets you listen to “Diane Young,” “Mansard Roof,” and “Giving Up the Gun” all under one license. Knowing this, the big PROs could gouge consumers with high prices, depriving listeners of cheap, accessible music. This has major repercussions on music consumption because Vampire Weekend should be, above all, accessible.

To prevent this cacophonous scenario, the DOJ sued ASCAP and BMI in 1941, forcing them to agree to “consent decrees.” These settlements provide a floor of protection for consumers, mandating that the two PROs agree not to discriminate between consumers or abuse their market power. That’s a noble goal, one in tune with both consumer protection and the principles of free competition.

" The Music Modernization act is a reminder that despite the intense polarization that mires us in gridlock over hot-button issues, the legislators we elect to write the laws sometimes do just that."

Since their introduction in 1941, these consent decrees have been amended a few times but still retain the same basic structure. But after 80 years, policymakers are beginning to think that these agreements are outdated and should be eliminated. Among them is Makan Delrahim, the Assistant Attorney General for the Antitrust Division of the US Department of Justice. In March of 2018, Delrahim sent soundwaves through the music world when he suggested the DOJ would soon phase out these consent decrees.

Although there’s certainly an argument for updating these consent decrees, phasing them out completely is a misguided approach. Despite being so old that Artie Shaw and his orchestra topped the charts when they were enacted, the consent decrees ensure a fair and accessible market for all music consumers. Without the decrees, the PROs could bully smaller venues and small businesses who want to play music into paying higher prices. They could also more easily force music creators to take smaller royalty percentages on their music, or leave them with no choice but to negotiate individually with people who wish to purchase their music.

Luckily, Congress has no aversion to old age—the average Senator is 61—and has recognized the importance of the consent decrees in their recent music omnibus bill, the Music Modernization Act. This bill mandates congressional oversight over any DOJ action regarding the consent decrees. The goal is simple: to stop the DOJ from upending a policy that has facilitated the success of American music.

In addition to imposing checks and balances on the DOJ, the Music Modernization Act also reforms the music industry beyond protecting consent decrees. It updates the way that royalties for music streamed online are paid out,  creates partnerships between publishers for online licensing, and gets rid of the bureaucratic hassle of sending Notices of Intention by mail each time someone wants to share a song.

None of the 2020 presidential candidates will proclaim the Act as the solution to America’s problems. But not everything government does has to be world-altering. We should laud Congress for any step it takes to improve people’s lives, whether or not it will make front page news. In fact, that’s what Congress—the body tasked with regulatory oversight—should be doing regularly. The Music Modernization Act is a reminder that despite the intense polarization that mires us in gridlock over hot-button issues, the legislators we elect to write the laws sometimes do just that. Sentiments toward Congress may be mixed, but everyone loves music. The American people would do well to appreciate how the former enables our enjoyment of the latter. So now, when you are listening to “Harmony Hall” on Spotify and reflecting on how a six-year hiatus from the ones we love can heighten our appreciation for them, carve out some time to stop your head-bobbing and acknowledge the members of Congress who wrote a law bringing music into the 21st century. Thanks to a legislative process that often works when we get beyond the vitriol of partisan politics, you won’t have to wait until 2021 to think about musical licensing.

Photo: “Vampire Weekend

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