An Ideal Policy Framework for Sound Recordings, Essay Example

As the Executive Vice President and CEO of Aftermath Entertainment Records, my position allows me to examine the growing pressure that has ensued over how the growth of the company and its influence on the increases returns for shareholders. To ensure that the interests of the stakeholders are met, I examined the ideal policy measures on the current licensing framework. Undoubtedly, I am aware that the current U.S. copyright laws were not devised to address a myriad of the licensing issues currently witnessed within the on-demand digital music systems and services (Menell, 2020). Therefore, difficulties and tensions exist with such services as a result of the complex licensing processes and systems for sound recordings and compositions within the digital realm, besides the desperate treatments that these works often receive under any jurisdiction.

Digital technologies have had an upended and indelible revolution in the music industry and its business models. For example, Cole (2018) establishes that in 2000, coffers from the revenues collected from the U.S. sales as well as licensing of music records hit a tune of $14.6 billion.  Cole (2018) establishes that later on in 2010, Warner generated close to 3.8 billion in terms of its music revenues, with 63% of these revenues generated from other digital streaming platforms (DSPs) such as Apple Music, Spotify, and YouTube. With the growth and the expansion in the number of collaborations and partnerships with social media platforms such as Instagram, TikTok, Facebook, and Snapchat the music industry generates a nine-figure revenue. Notably, the industry is also witnessing a faster growth in subscription streaming. However, in 2019, the total sales experienced in the music industry significantly decreased by 57%, an aspect that reduced record sales tremendously (Cole, 2018).  As provided, this sharp decline is related to the exponential growth of other illegal DSPs such as Napster and Limewire. While revenues within the music industry continue to plateau, the digital music service providers continue to heighten their returns on investment from the growth in music sales. Currently, this factor is a potential ‘blind spot’ for the recorded music.

Thus, Aftermath Entertainment Records may lobby for the reforms of section 115 of the Copyright Act to establish a blanket mechanism license specifically for digital use. The reforms accord the licensee the right to obtain a form of repertoire-wide mechanical license and access to management right entities that include the Harry Fox Agency. The reforms equally need to ensure that sound recordings and compositions are regulated equally and consistently within the digital jurisdiction (Ingham, 2020). On the other hand, reform on this policy framework will ensure that the owners of sound recordings and compositions should be allowed to withdraw or opt-out of the agreement to allow different DSPs to use their compositions in their interactive streaming systems and services.  As the Executive Vice President or CEO of Aftermath Entertainment Records, I believe that there is a need for Congress to draw a line between the two distinct types of copyrights that exist in recorded music, specifically for actual recordings and for underlying compositions (Ingham, 2020).   Therefore, this would ensure that artists who own their sound recordings and do not need to make their content available on platforms such as Spotify or other on-demand services. Further, they will have the freedom to agree with these platforms. Notably, this factor protects the interests of artists and lessens the exposure of their music to risks. The reforms need to ensure that the digital streaming service platforms secure mechanical and public performance licenses to aid in streaming their compositions.

Secondly, the proposal affirms the need to create a blanker license specifically for music works, based on the protocols that exist in section 114 licenses that govern digital transmissions of non-interactive services and sound recordings (Ingham, 2020).  This aspect is established to ensure that a specified or single organization such as SoundExchange is created to engage in the collection of blanker royalties. Spotify supports this approach in its argument that:

Before the CRB, the rate-setting procedures for mechanical licenses were “probably appropriate” and should not be modified significantly. If current legislation before Congress passes, however, these rate-setting procedures will likely change significantly (Digital Dilemmas: The Music Industry Confronts Licensing for On-Demand Streaming Services, n.d.).

The public performance licenses act as blanket licenses that the digital streaming service platforms need to obtain from different performing rights organizations (PROs) such as BMI, ASCAP, and SESAC. In cases where these musical works are listed within a database for the PROs, and as long as an on-demand service is obtained through a blanket license specifically from the PROs, they have the right to ensure that these pieces are performed publicly.

References

Cole, S. (2018, September 12). The impact of technology and social media on the music industry – Econsultancy. Econsultancy. https://econsultancy.com/the-impact-of-technology-and-social-media-on-the-music-industry/

Digital Dilemmas: The Music Industry Confronts Licensing for On-Demand Streaming Services. (n.d.). Www.americanbar.org. https://www.americanbar.org/groups/intellectual_property_law/publications/landslide/2015-16/january-february/digital-dilemmas-music-industry-confronts-licensing-on-demand-streaming-services/

Ingham, T. (2020, December 2). Social Media, Not Streaming, Is the Music Industry’s Future. Rolling Stone. https://www.rollingstone.com/pro/features/social-media-tiktok-instagram-video-games-music-money-1097428/

Menell, P. S. (2020). A Remix Compulsory Licensing Regime for Music Mashups. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3652693