House Judiciary Committee Demands Greater Transparency from ASCAP, BMI, Other PROs

Photo Credit: Capitol Hill by Noelle J. Lee

The House Judiciary Committee expresses concern about the lack of transparency from performance licensees and the ‘proliferation of PROs.’The US House Judiciary Committee has sent a letter to the Register of Copyrights, Shira Perlmutter, to request an examination of “emerging issues” related to performing rights organizations (PROs), including ASCAP and BMI.

Signed by the committee’s chairmen Rep. Jim Jordan and Rep. Darrell Issa, and member Rep. Scott Fitzgerald, the letter addresses two particular areas of concern — the “lack of transparency” surrounding the distribution of licensing revenue, and the “proliferation” of new PROs.

“It is difficult to assess how efficiently PROs are distributing general licensing revenue based on publicly available data,” reads the letter, obtained by Billboard. “For example, it is difficult to determine how accurately lesser known and independent artists as well as smaller publishers are being compensated compared to widely popular artists and major publishers.”

The letter continues, “requesting that the [copyright office] examine how the various PROs currently gather information from live music venues, music services, and other general licensees about public performance; the level of information currently provided by PROs to the public; whether any gaps or discrepancies occur in royalty distribution; what technological and business practices exist or could be developed to improve the current system; the extent to which the current distribution practices are the result of existing legal and regulatory constraints; and potential recommendations for policymakers.”

While the “proliferation” of PROs is a somewhat new concern, the questions surrounding transparency have circulated for some time. The National Music Publishers’ Association (NMPA) has spoken publicly about it, particularly after BMI switched its business model from non-profit to for-profit, being acquired by private equity firm New Mountain Capital.“I believe that you have a fundamental right to know what it costs you to use a particular collection society,” said NMPA CEO and president David Israelite back in February. “Now I will tell you that ASCAP gives you a pretty close look at what it costs; not exactly, but they give you a pretty close ballpark,” he continues. “BMI, at the end of the last fiscal year, we didn’t get that information.”

The House Committee’s request for what business practices exist or could be developed to improve the current system seems like a fairly easy one to tackle, at least on the surface. There already exists a company called Audoo which is doing exactly that; the company utilizes dedicated in-venue monitors to track songs, with installations in places like Australia and New Zealand.