Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

Firm Insights

BMI Wins Big in Landmark Partial Licensing Decision

Author: Scarinci Hollenbeck, LLC

Date: October 12, 2016

Key Contacts

Back

How Will BMI’s Victory in a Major Fractional Licensing Decision Affect the Music Industry?

In what could prove to be a landmark decision for the music industry, the U.S. District Court judge for the Southern District of New York ruled that Broadcast Music Inc. (BMI) was authorized to conduct fractional licensing.According to Reuters, the Department of Justice could not require BMI to change the manner in which it collects and distributes .

The decision

Judge Louis Stanton asserted that, under the consent decree implemented by the Department of Justice, as applied to BMI, fractional licensing is permitted. Specifically, the judge’s decision clarified that the consent decree does not ban fractional or 100 percent licensing of a composition. This means that the performance rights organization can license only the portions of compositions written and published by its member artists.

The decision contradicted the Department of Justice’s previous ruling that mandated BMI and the American Society of Composers, Authors and Publishers (ASCAP) to employ 100 percent work licensing. According to a Billboard report, these organizations were then given one year to implement the new full works licensing requirements. This decision has garnered criticism from across the music industry, from artists to songwriters and to record labels.

The difference between fractionalized licensing and full works licensing

The decision was significant because of the implications of full works licensing versus fractional licensing. The music publishing industry supports fractional licensing, which requires licensees such as YouTube, Pandora, Spotify, SiriusXM and various other digital or online streaming outlets to obtain a performance license from all copyright owners/publishers of each song. With full works licensing, the licensee would only need to obtain a public performance license from one copyright owner/publisher, because each copyright owner/publisher would have the right to license the public performance rights in the full work.

Following the judge’s decision, BMI is now free to continue fractional licensing of performance rights, which represents a big win for the music industry.

The decision’s potential impact

It remains to be seen how this ruling will unfold for the music industry, as well as ASCAP. However, it is clear now that the Justice Department’s consent decrees do not obligate BMI to offer full works licensing, which ensures that BMI writers and publishers will continue to be able to separately license their share of public performance rights in their works.

Several other copyright owners and entities in the music business are taking action after this decision as well. ASCAP also plans to file a similar lawsuit against the Department of Justice with respect to its consent decree.

Significance of the decision

Ultimately, Reuters reported that, as BMI accounts for 700,000 writers and music publishing companies, while ASCAP has 575,000 members, the decision could have a massive effect on the music industry. BMI and ASCAP license public performance rights for approximately 90 percent of the music featured in all media outlets, including movies, television shows, online music streaming and digital radio services, restaurants and various other public performance locations.

Do you have any questions? Would you like to discuss the matter further? If so, please contact me, Jill Michael, at 201-806-3364.

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

Related Posts

See all
Zoning Laws Explained: What You Need to Know Before Buying Property post image

Zoning Laws Explained: What You Need to Know Before Buying Property

Before buying property, it is critical to determine whether local zoning laws may affect your plans. If you plan to redevelop the property, you will want to confirm that local zoning regulations permit development as intended. If acquiring property that is already developed, you must verify that the use is permitted in the underlying zoning […]

Author: Wendy Rubinstein Quiroga

Link to post with title - "Zoning Laws Explained: What You Need to Know Before Buying Property"
Special Needs Trusts in New Jersey: Planning for Your Loved One’s Future post image

Special Needs Trusts in New Jersey: Planning for Your Loved One’s Future

For parents of a child with a disability, estate planning raises concerns that go well beyond deciding who will inherit their assets. Parents may spend years making sure their child has the right care, services, and support. Eventually, they must also confront a difficult question: Who will take over when they can no longer do […]

Author: George McGowan

Link to post with title - "Special Needs Trusts in New Jersey: Planning for Your Loved One’s Future"
What Every Real Estate Investor Should Know Before Buying a Rental Property post image

What Every Real Estate Investor Should Know Before Buying a Rental Property

Before buying a New Jersey rental property, an investor should verify realistic operating numbers, the property’s legal and regulatory status, lead-based paint and flood compliance, the existing leases and tenant protections, and the right ownership structure. A rental property is more than a piece of real estate; it is an operating business subject to legal, […]

Author: Donald M. Pepe

Link to post with title - "What Every Real Estate Investor Should Know Before Buying a Rental Property"
Can You Change an Irrevocable Trust in New Jersey? post image

Can You Change an Irrevocable Trust in New Jersey?

In New Jersey, an irrevocable trust can sometimes be modified even though its name suggests otherwise, and one of the primary tools for doing so is a process called decanting. Whether decanting is available depends on the specific terms of the trust and the discretion given to the trustee. Key takeaways: New Jersey has no […]

Author: Marc J. Comer

Link to post with title - "Can You Change an Irrevocable Trust in New Jersey?"
How Intellectual Property Valuation Will Impact Business Transactions post image

How Intellectual Property Valuation Will Impact Business Transactions

Intellectual property valuation determines the monetary value of a business’s IP assets, and it drives outcomes in licensing deals, joint ventures, mergers and acquisitions, financing, and ownership disputes. The most valuable assets of a business are often the things that cannot be seen or touched: a proprietary process, a copyrighted work, brand recognition, or the […]

Author: Jay McDaniel

Link to post with title - "How Intellectual Property Valuation Will Impact Business Transactions"
Data Center, Dark Fiber, and Lit Services Agreements in New Jersey: Key Terms and Legal Pitfalls post image

Data Center, Dark Fiber, and Lit Services Agreements in New Jersey: Key Terms and Legal Pitfalls

For New Jersey data center owners and operators, a service agreement may look routine when it is signed. The network is functioning, the vendor is meeting its installation schedule, and the parties have agreed on pricing and performance specifications. The provisions that seem most important at that stage are often the technical ones. That changes […]

Author: George McGowan

Link to post with title - "Data Center, Dark Fiber, and Lit Services Agreements in New Jersey: Key Terms and Legal Pitfalls"

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Sign up to get the latest from our attorneys!

Explore What Matters Most to You.

Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.

Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.

Let`s get in touch!

* The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form. By providing a telephone number and submitting this form you are consenting to be contacted by SMS text message. Message & data rates may apply. Message frequency may vary. You can reply STOP to opt-out of further messaging.
“If you would like to submit a file, please email it directly to info@sh-law.com.

Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!