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Must Read #irespectmusic Bloomberg Op-Ed: Deregulate the Music Industry

December 16, 2015

As we wait to see what the federal government decides we are worth, take a look at an excellent op-ed from the Bloomberg editorial board entitled “Deregulate the Music Industry.”

In 1941, after major radio stations refused to pay the fees that the American Society of Composers, Authors and Publishers was charging to broadcast its songs, the federal government filed an antitrust suit. After all, how could Americans do without hearing the nation’s biggest hit, Glenn Miller’s “Chattanooga Choo-Choo,” on the box? A consent agreement followed, which was also signed by ASCAP’s chief competitor, Broadcast Music Inc.

The agreement set a payment structure and an arbitration process that has lasted, with various modifications, to the present day. Last year, a rate court ruled that ASCAP is entitled to 1.85 percent of Pandora’s revenue, and this year, a court ruled that Pandora must pay 2.5 percent of its revenue to BMI. Pandora is appealing the BMI decision.

This consent agreement should have been lifted decades ago. Instead, it has spawned a convoluted regulatory bureaucracy that micromanages nearly every aspect of the music industry’s finances, often with no rhyme or reason.

 

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