The Department of Justice (DOJ) is in the process of making a decision that could impact millennials’ access to streaming music.
Reports have leaked from the Justice Department that they are under pressure to make decisions that will increase the cost of music for all consumers. This is a complicated issue, yet it comes down to one core question — whether the federal government is going to change the rules of business for consumers of licensed music in a way that will hike costs and limit choice. If they change the rules, it will raise prices and many retail stores, radio stations and restaurants who play music will pass on those increased costs to consumers. Some online streamers of music may even go out of business.
It is truly amazing how far the music industry has come in such a short amount of time. Our parents listened to giant, 10-inch records, our older cousins listened to CDs, and now we’re conveniently listening to high-quality, digital tracks on our phones and iPods.
The only reason that the music industry has been able to progress this far is because the federal government has been defending it from anti-consumer monopolists for 75 years. Today, however, the Department of Justice (DOJ) is contemplating lifting its antitrust restraints on the music industry. I fear that removing these safeguards will cause millennials like myself to lose the luxury of listening to many of our favorite songs in the years to come.
The two principal organizations demanding that the DOJ throw away these regulations are the American Society of Composers (ASCAP) and Broadcast Music, Inc. (BMI). These two music collectives, which gather song royalties from businesses and disperse them to copyright holders, are government-recognized monopolies that control approximately 90 percent of the world’s music compositions.
ASCAP and BMI’s calls for reform should be ignored by all those who are well-acquainted with the music industry’s history. For years, these two organizations engaged in anti-competitive practices with the objective of artificially raising the cost of songs. To limit collusive behavior and anti-competitive actions, the department ultimately decided to put these collectives under antitrust consent decrees in 1941. The conditions of these consent decrees require that ASCAP and BMI license songs at a fixed rate to all purchasers. These restraints have allowed the music industry to thrive and grow at unprecedented speeds for the past 75 years.
As technology has progressed, however, ASCAP and BMI have attempted to find loopholes to circumvent these restrictions. In fact, immediately after the founding of internet music sites like Pandora and YouTube, ASCAP tried to overstep the boundaries of its consent decree by removing digital rights from its song catalogs. This move would have allowed ASCAP to stranglehold the new online market by charging online streaming companies cutthroat royalty rates.
While online music streaming provides consumers unlimited access to songs, it also gives lesser-known tunes a chance to be heard by the general public. If online streaming companies were forced to pick and choose which songs they played based on crony capitalist licensing agreements, song selections would be reduced to only guaranteed hits recorded by already-acclaimed artists.
Thankfully, the DOJ recognized the insensibility of ASCAP’s move earlier this year. The department stepped in and waged a $1.75 million settlement fee on the company for its brazen attempt to unilaterally change the rule of law, and it warned the collective to follow its consent decree in the future.
Today, however, ASCAP and BMI are hoping that the DOJ has forgotten about its past troubles with the law. The Antitrust Division of the Department of Justice has reportedly come to the conclusion that the consent decrees should stay in place unchanged. These groups are now petitioning for the department to weaken its antitrust decrees and go against the findings of the DOJ’s own Antitrust Division. For two years, the department has been actively soliciting comments and legal arguments from the stakeholders in this controversy. They have come to the right decision, yet BMI and ASCAP are trying to put a thumb on the scale to change this decision before it is unveiled to the American public.
The bottom line is that young consumers of music will have to live with the final decision of the federal government. We want access to online music and we don’t want the rules changed because some well-funded lobbyist is pushing for rules that will hurt consumers and help the music collectives.
Music is freedom, ASCAP and BMI wish to enslave it, slowly extinguishing that little light that has and should always be there for us.
