The Future of Music Copyright Collectives in the Digital Streaming Age

46 Pages Posted: 6 Apr 2022

See all articles by Eric Priest

Eric Priest

University of Oregon School of Law

Date Written: December 23, 2021

Abstract

Digital streaming is now the dominant music consumption model, accounting for more than 80 percent of music revenues in the United States. The rapid rise to dominance of this new model has profound implications for the future of music licensing. The licensing needs of streaming services are unprecedented in scale. Spotify currently hosts 70 million recordings, with more than 60,000 new recordings uploaded every day. It would seem the need for collectives that license music en mass has never been greater. And indeed, collectives are used more extensively in the music industry today than ever before. The music publishing industry relies largely on revenue from copyright collectives such as ASCAP and BMI, as well as a new collective—created by 2018’s Music Modernization Act (MMA)—known as the Mechanical Licensing Collective.

I argue in this Article that the rise of digital streaming is, counterintuitively, likely to weaken copyright collectives. Collective licensing rose to prominence in the music industry to solve a twentieth-century problem: prohibitive transaction and enforcement costs associated with licensing hundreds of thousands of restaurants, bars, businesses, and broadcasters nationwide. Streaming involves entirely different market dynamics. It is a highly concentrated market: Spotify, Apple Music, and Amazon Music control two-thirds of the global streaming market. It has never been easier for copyright owners to directly license a handful of platforms that deliver the lion’s share of revenue. Further, technology has markedly reduced the cost of tracking uses and distributing royalties. Accordingly, music publishers are increasingly eager and emboldened to disintermediate collective licensing organizations, especially in the performance rights context. This Article first makes sense of the bewildering complexity of digital music licensing law, including key changes under the MMA. It then argues that because of technological and market changes, the future of collective licensing will likely look very different from its present as copyright owners are increasingly enabled and motivated to direct-license their works.

Keywords: copyright, music, music copyright, mechanical licensing collective, MLC, ASCAP, BMI SESAC, performance rights organizations, performing rights organizations, collective licensing, streaming, collective copyright management, Music Modernization Act, MMA, SoundExchange, music law, entertainment law

Suggested Citation

Priest, Eric A., The Future of Music Copyright Collectives in the Digital Streaming Age (December 23, 2021). Columbia Journal of Law & the Arts, Vol. 45, 2021, Available at SSRN: https://ssrn.com/abstract=4041650

Eric A. Priest (Contact Author)

University of Oregon School of Law ( email )

1280 University of Oregon
Eugene, OR 97403
United States

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