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Justice Department To Refuse To Modify PRO Consent Decrees

WASHINGTON D.C. (CelebrityAccess) — The U.S. Department of Justice just dealt a major blow to the music publishing industry after they declined to recommend changes to the consent decrees which govern performing rights organizations ASCAP and BMI, according to a story first reported by Billboard.

The PROs had petitioned to amend the consent decrees to allow them to withdraw digital licensing from the blanket licenses offered by the to organizations. The consent decrees, first implemented in 1941, have not been amended in more than a decade and, according to many publishers and rightsholders, do not properly address the current paradigm of on-demand music.

Music publishers and artists have argued that the current configuration of the consent decree, particularly in regards to digital, has played a role in the to a precipitous decline in songwriter income in recent years.

As well, DOJ has indicated that it intends to move forward with its interpretation of the consent decrees that require the PROs to use "100-percent licensing" meaning that any rightsholder for a composition can license it, provided that the rightsholder pays the other rightsholders for the work.

Publishers have argued that this will put downward pressure on royalty rates as music services to rate shop for the lowest licensing rates.

"If the DOJ imposes 100 percent licensing — and it certainly looks like like they will — it will be a nightmare for every publisher and songwriter in the world,” an unnamed music publishing exec told Billboard before news of the decision was announced. “It will up-end a successful business that has been running for 100 years. The DOJ has no idea and it's clear that they don’t care, but the fallout will be immense.”

While the Justice Department's review carries significant weight, the final decision on the consent decrees rests with two federal judges overseeing the cases, and the performing rights organizations could object to the changes in court. – Staff Writers