The proposed merger of AT&T and Time Warner has drawn censure from both sides of the political aisle, as well as a Senate hearing that looked into the potential for the combined company to become a monopoly.
But if we are going to examine media monopolies, we should look first at Silicon Valley, not the fading phone business.
Mark Cuban, the internet entrepreneur, said at the meeting of the Senate Judiciary Antitrust Subcommittee last week that the truly dominant companies in media distribution these days were Facebook, Google, Apple and Amazon.
“Facebook is without question in a dominant position, if not the dominant position, for content delivery,” he said.
Look at the numbers. Alphabet (the parent company of Google) and Facebook are among the 10 largest companies in the world. Alphabet alone has a market capitalization of around $550 billion. AT&T and Time Warner combined would be about $300 billion.
The radio industry is about to learn what many others already have — when you push Irving Azoff, he pushes back. Usually harder.
After nearly two years of negotiations over licensing rates for radio song plays, the Radio Licensing Music Committee (RMLC) recently “ambushed” Global Music Rights (GMR) — the nascent U.S. performance rights organization launched in late 2013 by Azoff, in conjunction with MSG Entertainment and with former ASCAP executive Randy Grimmett at the helm — with an antitrust lawsuit filed in the U.S. Eastern District Court of Pennsylvania on Nov. 18.
That was followed by the filing, on Dec. 6, Daniel Petrocelli and his firm O’Melveny & Myers of an antitrust suit on behalf of GMR against the RLMC in the U.S. Central District Court of California. Petrocelli stresses that the suit is not retaliatory, but was filed to fight the RLMC’s “collusive tactics to depress [the] prices” that radio stations pay songwriters.
Azoff, the legendary artist manager who began GMR because he felt songwriters were getting shortchanged in performance licensing, tells Billboard that he takes “artist rights very seriously. I grew up around guys named Lew Wasserman[former head of MCA, now known as Universal Music Group] and Steve Ross [who created Warner Music Group], who taught me to respect talent. We feel that they [the RMLC] violated respect for talent. We didn’t start this fight, but we aren’t going away.”
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.”