Friday, July 10, 2009

Sound Exchange Monopoly Preserved... For Now

Billboard reports today that D.C.'s US Appeals Court Declined To Rule On CRB due to a missed deadline.

Some background: Royalty Logic had filed a motion questioning the constitutionality of the US Copyright Royalty Board (CRB). If the courts agreed with Royalty Logic's arguments, rates previously set by the CRB may have been invalidated, which is why many groups, including the NMPA, opposed the motion.

The good news about the US Appeals Court's choice is that the rate setting process will not have to restart at square one. However, I think it is bad news that left intact is the CRB's effective decision to grant Sound Exchange a limited monopoly as the sole designee entitled to collect master performance royalties in the United States.

Royalty Logic had originally filed its motion because it too wanted to be an master performance royalty collection agent.

I do not support Royalty Logic's positions on all matters, but ultimately I am concerned that recording artists and record labels will have no choice of collection agents for the master performance royalties contemplated by the Digital Milennium Copyright Act (unlike songwriters and publishers, which may choose to affiliate with one of three major performance rights societies: ASCAP, BMI or SESAC).

Sound Exchange may have won this battle, but perhaps there will soon be another opportunity to introduce competition in the master performance royalty collection marketplace. After all, one thing that set the US music industry apart from the rest of the world is that it allowed competition amongst collection agents.

The posts on this blog confer no rights or warranties. The opinions expressed on this site are my own and may not represent those of my firm. © 2009, Cedar Boschan. To request permission to reproduce, please contact boschan@royaltyauditors.com.

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