In response to a request from the U.S. Congress, on February 10, 2025, the U.S. Copyright Office ("USCO") issued a notice of inquiry to solicit public feedback on a number of issues relating to performance rights organizations ("PROs") and the public performance of musical works.
Initial written public comments are due April 11, 2025, and reply comments are due May 27, 2025.
Background
Under U.S. law, musical work copyright owners have the exclusive right to perform their musical works publicly. PROs were established to facilitate the licensing of musical works for public performances. As noted by the USCO, PROs "contract[] with songwriters and publishers for the authority to license the public performance rights in their musical works, and then provide[] collective licenses of those rights to users, allowing [those users] to publicly perform the works in the PRO's repertoire." Such "blanket" licenses create efficiencies for many licensees and copyright owners when licensing thousands of songs versus a song-by-song licensing scheme.
PROs provide licenses for a wide variety of performances, such as terrestrial, satellite, and internet radio, website and television uses, and bars and restaurants. PROs also offer different royalty rates based on several factors, including: the number of licensees paying royalties; the rates charged to those licensees; the administrative fee charged for the PRO's services; the PRO's for-profit or not-for-profit status; and the methodologies used for royalty calculations, which may provide higher payments based on the relative commercial value of a musical work.
Because musical works are frequently created by multiple songwriters, composers, and/or lyricists, co-ownership issues often introduce complexities when licensing musical works. While the default rule is that joint authors own equal and undivided interests in a copyrighted work, musical work joint authors often agree to alter that rule, including to instead divide the ownership shares unequally and to permit separate licensing of those shares. If a musical work has multiple songwriters and publishers who have authorized different PROs to license their separate fractional interests, then any PRO's ability to offer a license is limited to the fractional interests that the PRO has obtained. The result is that any user wanting to publicly perform a particular musical work must confirm that it has obtained a license for all of the fractional interests in the work, which may require licenses from multiple PROs.
While certain PROs have existed for decades — ASCAP, SESAC, and BMI —three new PROs have recently formed: Global Music Rights ("GMR"), PRO Music Rights, and AllTrack. The increasing number of PROs may thus result in a licensee needing to obtain more licenses than it has historically to cover all interests in a musical work.
The USCO also noted that PROs do not all disclose comprehensive information concerning the works that are covered by their licenses, and their royalty distribution practices and policies. To accurately distribute royalties, PROs must track the musical works performed by their licensees. In certain circumstances, accurate usage data may be unavailable or economically inefficient to obtain. PROs may then rely on proxy data to estimate usage.
Subjects of Inquiry
In September 2024, the House Judiciary Committee sent USCO a letter relaying concerns over (1) the increasing numbers of PROs and licensees receiving demands for royalties from new entities claiming to represent songwriters, and threatening litigation if the demands are not met, and (2) difficulties regarding how to "assess how efficiently PROs are distributing general licensing revenue, based on publicly available data."
In its notice of inquiry, the USCO requested public comment on the following topics regarding the increased number of PROs:
1. To what extent, if any, have there been increased financial
and administrative costs imposed on licensees associated with
paying royalties to additional PROs;
2. Factors that may be contributing to the formation of new PROs;
and
3. Recommendations on how to improve clarity and certainty for
entities seeking to obtain licenses from PROs to publicly perform
musical works.
In addition, the USCO requested public comment on the following topics concerning PROs' general licensing revenue distribution models:
4. How PROs currently gather information concerning musical
works publicly performed at live music venues, on music services
(e.g., digital music providers), and by other general
licensees (including bars, restaurants, stores, hotels, and similar
venues);
5. Whether the manner in which the PROs gather information
regarding public performances adversely impacts lesser-known
artists and smaller publishers;
6. What information PROs currently provide to the public, including
with respect to:
a. repertoire information and metadata (e.g., song
titles, songwriter and publisher information, ownership shares, and
unique identifiers); an
b. royalty distribution practices and policies;
8. What technological and business practices exist or could be developed to improve the current systems for usage tracking and royalty distribution;
9. The extent to which current PRO royalty distribution practices are the result of existing legal and regulatory constraints; and
10. Additional recommendations for Congress to address these issues.
Takeaway
If you are interested in submitting written comments on these topics or further wish to discuss music licensing issues and/or policy studies, please contact Anna Chauvet (anna.chauvet@finnegan.com) for more information. Anna is currently a partner at Finnegan, Henderson, Farabow, Garrett & Dunner, LLP and leader of Finnegan's copyright practice. Anna previously served as associate general counsel at the USCO. Anna has deep institutional knowledge of music licensing issues, and her years of policy experience position her well to advocate for clients.
Initial public comments are due April 11, 2025, and reply comments are due May 27, 2025. Both types of comments must be submitted electronically to the USCO through regulations.gov.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
