This RMLC/GMR Fight Is No Joke.

2

By now your head is probably spinning about what to do regarding the proposed interim license on the table for GMR recordings. And, it should be. With GMR in the PRO mix this is getting very confusing. The back-and-forth blame game between GMR and the RMLC has many managers wondering what to do as the January 31st deadline to sign their license, or face possible litigation, closes in. To paint a clearer picture about what you’ll have to deal with if you do not sign the GMR license, or if you try to avoid playing GMR recordings, we turn to broadcast attorney John Garziglia who made this clear for you about what’s at stake.

(by John Garziglia) Most radio stations have received emails in the past several weeks from both the Radio Music License Committee (RMLC) and Global Music Rights (GMR) regarding an interim license with, and new licensing fees owed to, GMR. While the subject of music licensing can get very complicated quickly, let’s take an overview look at this GMR issue.

The first question naturally asked by radio stations is whether signing up with GMR is a must, or can a radio station simply avoid playing GMR-licensed music? The short answer is that, given several coinciding factors, it is almost impossible to confidently assure that no GMR music is played. Conversely, not having a license with GMR and playing a GMR-licensed song can create a liability for a radio station of up to $150,000 per occurrence.

It is a high risk endeavor to try to avoid playing GMR-licensed music. While it might be procedurally feasible to pull all GMR-licensed music from a music library if a full list of GMR-licensed music was available, such a reliable up-to-date full listing is not currently available to the public. Also, GMR-licensed music can appear in syndicated programming elements, agency spots and live event background music. Therefore, even if a music library could be purged of all GMR music, there remains a lingering liability that GMR music might be broadcast. Thus, a prudent radio station owner likely has no choice but to sign up with GMR.

The second question that arises is whether fees paid to GMR can be deducted from payments owed to ASCAP, BMI and SESAC, the other three performing rights organizations. Even though GMR is not increasing the number of hours in a day or the quality of music offered – indeed, virtually all artists signed by GMR have come from one of the other three – the payment sought by GMR is in addition to whatever is currently owed to ASCAP, BMI and SESAC.

Compounding the unfairness of additional fees being sought for the identical music is the recent position of BMI and others that it is offering “fractional”, rather than “whole work” licensing. Up until recently, radio stations and the DOJ believed that if a song was offered in a performing rights organization’s catalog, it was fully licensed to be played by a radio station.

But recently, BMI challenged this “whole work” licensing metric by claiming that it is only offering fractional licensing for the music in its catalog. A song, even though in the BMI catalog for one of its songwriters, might also be licensed by another performing rights organization for another co-songwriter. GMR is now specifically offering fractional licensing having signed only one of several songwriters for many songs.

Fractional licensing results in an impossible burden on a radio station to determine whether it has a license for each songwriter, rather than for the song itself, for each song played. As an example, if Peter, Paul and Mary are co-songwriters for a particular song, BMI could represent Peter’s portion of the song and be paid a fee, SESAC could represent Paul’s portion of the song and be paid a fee, and a radio station could still be sued for the $150K statutory damages for playing the song if Mary licensed her portion of the song without notice to a newly-formed performing rights organization. Suffice it to say that radio stations do not get added value or benefit from fractional licensing but rather have the increased danger of playing a partially-unlicensed song.

GMR is now offering is an interim license subject to further negotiations that must be signed up for by January 31, 2017 to protect a radio station back to January 1st which is when many of its artists commenced their GMR representation. But, whatever “rate” a radio station is now offered or negotiates may be of no consequence since GMR’s interim license agreement expressly reserves the right to adjust the current rates up or down once “permanent” rates are agreed upon. Thus, if negotiations go badly for radio broadcasters, the rate that is now being paid to GMR could be vastly increased and owed in arrears.

US copyright law vastly favors songwriters with the astounding $150K/song statutory damages figure as a hammer. If the law is to favor songwriters in this way, the law should also protect radio stations from the scheme now being run by GMR (and for that matter SESAC, BMI and ASCAP) in which a radio station that plays any music whatsoever cannot as a practical matter avoid paying a fee to each entity.

It is possible that the only way that GMR and the other performing rights organizations will credibly enter into fair negotiations with radio stations is if all songwriter fees currently paid pre-GMR are put into a common fund and the performing rights organizations including GMR are tasked with arguing among themselves who gets what. Unfortunately, there is no antitrust or copyright law legal theory of which I am aware that could currently accomplish this.

In the future, GMR may be held to account by the Department of Justice under antitrust law in the same way as DOJ has done with ASCAP and BMI. But, such a DOJ action will take extraordinary time, effort, money and litigation from our industry.

It is Congress that writes our copyright laws. Representative Marsha Blackburn (R-TN) is the new Chair of the House Subcommittee on Communications and Technology. Representative Blackburn is highly in favor of adding to radio stations the obligation for recording artist performance fees which would be another significant sum to be paid for playing music (an additional 6% to 7% of gross revenues if what satellite radio pays is any metric).

John Garziglia - RadioCongress will likely ultimately determine the long-term future of music licensing. Now, more than ever, it is important for our radio broadcasting industry to maintain a healthy lobbying effort on Capitol Hill.

John F. Garziglia is a Communications Law Attorney with Womble Carlyle Sandridge & Rice in Washington, DC and can be reached at (202) 857-4455. orJGarziglia@wcsr.com

THE HISTORY OF THIS FIGHT
– RMLC: GMR Contacting Stations With Bad Information
– RMLC Withdraws Injunction Against GMR
– 
GMR And RMLC Strike Tentative Deal
– Azoff Fires Back At Radio: “It’s A Cartel”
Radio Responds. Calls Azoff A Bully
 Radio Industry Files Anti-Trust Complaint Against GMR

2 COMMENTS

  1. It’s easy to say that, but to implement it will apparently be a whole different matter. As some stations library would be dramatically stunted if they were to just stop playing GMR music. That is the problem. These guys all think radio is making tons of money, it’s not. Some stations are subsidized by others.

    Another problem is that our stations have reached out to GMR for rates, twice now and still haven’t heard back. So who knows if we’ll get this squared away by Jan 31st.

  2. The forceful Mafia tactics that the GMR is using in this matter amounts to bullying, blackmail, and a few other things including unreasonableness, extreme ego, and bad business practice that wouldn’t pass the Better Business Bureau.
    And by not making available a list of songs to the radio stations, that they want stations to pay more for, but won’t tell the stations what those songs are, this is a downright scam.
    In business, we are accustomed to having a proposal of what we are being asked to buy, and then we have the right to say no.
    I request that Radio Ink do broadcasters a service by pressing the GMR for a list of the product that they are asking broadcasters to pay more for, and publishing that list for all to see, so stations can then make the decision to purge their playlists of that product, if an individual broadcaster feels that the asking price for that music is higher than the actual value of that music to the station. Which my view is, is that their view of the value of their music is extremely overinflated.
    Apparently, GMR doesn’t appreciate what broadcasters already pay in license fees; so let them do without broadcast airplay for 6 months or a year, as broadcasters did in the 40’s, and see how they like that decrease in revenue.

LEAVE A REPLY

Please enter your comment!
Please enter your name here