Taylor Swift and other top recording artists may be on the brink of a windfall if Sony/ATV, whose music catalog includes the Beatles along with Swift and many other top artists, follows through on a plan to bypass BMI and ASCAP.
“The No. 1 music publisher has decided to go it alone in the battle to boost digital royalties paid to songwriters,” the New York Post reports, noting that the company intends to dump the two entrenched performance-rights organizations by year’s end.
“Bypassing BMI and ASCAP, which collect royalties for songwriters when their tunes are played on the radio, streamed online or piped into a store, would allow Sony/ATV to negotiate directly with services such as Pandora, Spotify and YouTube,” the Post adds. “Songwriters complain that BMI and ASCAP are bound by outdated government rules that result in paltry royalties from digital outlets. The pain is especially acute as CD sales and digital downloads are in decline, while streaming services are the only area of growth.”
Sony/ATV CEO Martin Bandier sent a letter to songwriters in July discussing the plan to pull out of ASCAP and BMI.
“Sony/ATV already tried a partial pullout from the professional-rights organizations, forcing companies like Pandora to negotiate directly for a license to stream music,” the report notes. “Pandora sued, arguing that music publishers couldn’t make partial withdrawals from BMI and ASCAP, which are bound by decades-old consent decrees with the Department of Justice that determine royalty rates.”
Sony lost in federal court, where it was ruled that “either the publisher’s entire catalog of licensable songs remained with the licensing groups or none did,” the Post reports. “Sony/ATV has appealed the courts’ all-or-nothing rule and is imploring the DOJ to review consent decrees it considers antiquated.”
Sony/ATV was reportedly being paid a 5% royalty by Pandora after negotiating directly with the streaming service, but that rate reverted to 1.85% after the courts ruled.
“No. 2 publisher Universal Group Music Publishing is also anxious to enter into direct negotiations over digital rights,” the Post adds. “But sources close to the company say it’s more willing to wait out both of Sony/ATV’s appeals.”
Sony reportedly would not confirm that it’s pulling out from the licensing organizations, but acknowledged that it still sees the move as an option.