The digital music era has seen no shortage of lawsuits over payment for songs — but the latest battle is poised to rock the industry.
Global Music Rights, a boutique performing rights organization, claims the country’s 10,000 radio stations are acting as a cartel to keep payments to songwriters artificially low, according to a complaint filed Tuesday in California federal court.
At the heart of the issue is how songwriters get paid when their music is played on a terrestrial radio station. Here’s how it works: Most rightsholders are represented by either ASCAP or BMI. Those organizations typically license music through “blanket licenses” covering their entire collections. Consent decrees issued by the Department of Justice decades ago in an effort to avoid antitrust issues require ASCAP and BMI to give a license to anyone who’s willing to pay for one.
Music industry heavyweight Irving Azoff launched GMR in 2013 in an effort to give elite songwriters another option and, hopefully, more money.
While GMR boasts songwriters behind hits by artists including John Lennon, Kenny Chesney and Drake, its roster of about 70 clients and 26,000 works pales in comparison to the combined 22 million compositions held by ASCAP and BMI — according to the complaint, that is by design.
“GMR has not accumulated and has no intention to amass the market power that other PROs have wielded,” writes attorney Daniel Petrocelli. “By keeping its catalog small and high-quality across the board, GMR is able to provide personalized customer service to its songwriters and keep the cost of those services low.”
GMR is now suing the Radio Music License Committee because it claims the group is ensuring there is no competition among radio stations in order to stifle the rates they pay to license songs.
“RMLC’s member stations are competitors,” writes Petrocelli. “Yet these ‘competitors’ created and actively participate in a ‘committee’ whose very purpose is to negotiate with PROs as a group and destroycompetition among them in the acquisition of performance license rates.”