MYTHS AND FACTS ABOUT MUSIC LICENSING and WHY H.R. 789 IS NECESSARY MYTH: Music licensing organizations represent the "little people." FACT: ASCAP, BMI and SESAC are bureaucratic monopolist collective bargaining agencies. MYTH: The current music licensing system is market-oriented and fair to all participants. FACT: FACT: In the free market, customers can inspect what they are buying and negotiate a fair price, or purchase an alternative product. Music licensing customers get no product information, no comparison shopping opportunities, and no way to choose an alternative product because no one knows whether a song is in the repertoire of ASCAP, BMI or SESAC until a lawsuit is threatened or filed. The music licensing societies use their monopoly powers to force specialty radio stations to pay for costly "one-size-fits-all" licenses, regardless of how much music they actually use. MYTH: The current music licensing system protects America's intellectual property and FACT: The secrecy-laden music licensing system best protects its administrators, who not only exploit their monopoly position to treat licensees unfairly, but who also treat the beneficiaries-songwriters and publishers — with impunity. It has been reported that more than $140 million collected annually by the societies is used for "overhead" including the accumulation of a litigation fund in excess of $100 million that is explicitly used to intimidate small businesses into "compliance." MYTH: ASCAP and BMI are required by their consent decrees to license anyone who asks at a fair price. Rate disputes are handled fairly pursuant to the ASCAP and BMI consent decrees. FACT: "Fair" prices are determined by the societies, and can only be challenged by initiating a lawsuit in a single court located in New York City. The mere cost of the airline ticket and lawyers persuade most small businesses to pay whatever fee is demanded rather than fight. FACT: During the entire forty-five year history of the current music licensing scheme, only three music users have been able to afford the millions of dollars it costs to initiate a case and continue it through to a verdict. In each case, however, the user was victorious in court, which demonstrates that access to the system is the key to fairness in musical licensing. This is hardly a system that is fair to small business. MYTH: The licensing societies would like a negotiated solution that assists small business. FACT: Invitations to negotiate have been employed by ASCAP and BMI previously to distract Members of Congress from the real issues in this legislation and escape an uncomfortable situation the fact that 64 Members of Congress have cosponsored H.R. 789, which should justify a hearing at which small businesspeople could tell the subcommittee about the societies' heavy-handed "customer relations." FACT: The societies' representatives have previously told Coalition representatives that the only subject they will negotiate is rates - how much small business music users will pay. The Coalition's concerns, and the legislation, are broader than rates, and include structural changes to make the system fair to all consumers of music. MYTH: Music licensing reform legislation would be a confiscation of intellectual property and significantly reduce songwriters' income. FACT: Songwriters and licensing societies are, and would continue to be should H.R. 789 be enacted, compensated handsomely for every performance in a commercial establishment. Broadcast networks, broadcast stations, cable networks, cable systems or satellite systems - and often two or three of them - each pay amply for the very same performances that business establishments are asked to pay for again. MYTH: Music licensing reform legislation would impose onerous, expensive and unnecessary burdens on the licensing societies. FACT: H.R. 789 is basic consumer protection legislation that would relieve onerous, expensive and unnecessary burdens imposed by the current system on small business. H.R. 789 would require the licensing societies to: • provide music consumers easy on-line access to lists of the songs licensed by each • provide consumer information that ensures price equity for small business ⚫ resolve local licensing disputes through local arbitration, not in New York City; ⚫ offer radio broadcasters limited use licenses at rates that reflect the amount of music actually used; ⚫ respect agreements between lessors and lessees regarding music licensing liability. H.R. 789 also would require the Justice Department, as the only party empowered to bring compliance issues to the attention of the "rate court," to report annually to Congress regarding its oversight of the ASCAP and BMI consent decrees. A marching band plays a song during halftime Quick, how many times should the music licensing societies (ASCAP/BMI/SESAC) be paid? Greater Southern Country Music Assn. Office of the Representative-at-Large Hon. Jan Mayers-Chmn House Small Business Committee Washington, DC 20515 Dear Congresswoman Meyers: May 2, 1996 G.S.C.M.A. represents over 2000 member/songwriters/ecording artists/publishers and over 800 radio stations, both Country and Gospel/Christian/Religious in the United States and Europe. As the Rep. at Large, I am writing on behalf of our members to support the investigations against ASCAP and the allegations of the National Restaurant Association and the Religious Broadcasters Association. Many of our members are also ASCAP members as songwriters and/or publishers. Our members' records are distributed to our member radio stations who return monthly or weekly playlists to our magazine office in Florida to be compiled into our monthly charts in Country and Christian music for both the USA and Europe. In all, there are those four charts in each magazine, published monthly or bi-monthly for the past eight years. Our members are also performers in restaurants, clubs, hotels, resorts, and churches in both the USA and Europe. Hence, our affiliation with the National Restaurant Association and the Religious Broadcasters. What we wish to show to the committee is that as both ASCAP members and songwriters/publishers/artists/composers: we are supposed to be receiving the royalties that ASCAP so diligently collects from the restaurants and radio stations-But we don't get any money at all! ASCAP collects these royalties under the false pretenses that they are fairly distributing these moneys to us-the writers and publishers whose works aro boing performed. They sign us up as members under the outright fraud that they will collect our royalties and distribute them to us. In fact, ASCAP does neither. There is a clique in Tin Pan Alley, Nashville, and LA. that gets the lion's share of the funds, while our members get totally defrauded Last year, I had as many as nine songs listed on the G.S.C.M.A. charts at one time, and two on the Europe and USA charts for 18 and 21 months each. My ASCAP checks? Zero! My publisher, with over 4000 gold records, several dozen artists, and consistently at least 20 people on tho charts at each issue? His ASCAP chocks-Zero! Why? Only a small fraction of the FCC licensed radio stations are surveyed by ASCAP. They rofuse to survey our member stations or the Restaurants to see what they are playing, so that they can keep the moneys collected in the hands of their inside clique. Aftor 1995's Congressional action, they sent ali membore the attached 'Member Extension Agreement' requiring us to rubber-stamp the fraud or lose our memberships. I filed complaints with FBI offices in both Austin, Texas and New York City. Both offices consulted with the local US Attomey's offices and refused to Investigate ASCAP. You don't suppose there was too much pay-ola going on. do you? I complained to Janet Reno's office. Her letter is on file in Cong. Chet Edward's Belton, Texas with my spring 1995 detailed complaint in this matter. Janet Reno refused to investigate the largest annual monetary fraud in the History of the United States-ASCAP! There own member financial statements reveals that they took in 17/3 of a billion dollars annually from the US alone! Small wonder that they can afford a huge highrise in New York City, LA, and Nashville, and to openly buy US attorneys, Federal Judges in the Southern District of New York, and the FBI. On behalf of our GSCMA members, please take this fraud and conspiracy to commit fraud totally out of business. Please stop tho Congressional sponsorship of this fraud. Quit looking the other way, as Congress has for the past five decades, and re-invent this wheel. It's totally corrupt and decades beyond repair. May I remind you that I am also a statu delegale tu the parly convention, and that it is an election year. |