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[Federal Register Volume 90, Number 26 (Monday, February 10, 2025)]
[Notices]
[Pages 9253-9257]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-02418]

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LIBRARY OF CONGRESS

U.S. Copyright Office

[Docket No. 2025-1]

Issues Related to Performing Rights Organizations

AGENCY: U.S. Copyright Office, Library of Congress.

ACTION: Notice of inquiry.

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SUMMARY: The U.S. Copyright Office is collecting information regarding 
issues related to performance rights organizations (``PROs'') and the 
Copyright Act's public performance right for musical works. It is 
initiating this inquiry at Congress's request to gather information on 
questions related to the increase in the number of PROs and the 
licensing revenue distribution practices of PROs.

DATES: Written comments must be received no later than 11:59 p.m.

[[Page 9254]]

Eastern Time on April 11, 2025. Written reply comments must be received 
no later than 11:59 p.m. Eastern Time on May 27, 2025.

ADDRESSES: For reasons of governmental efficiency, the Copyright Office 
is using the regulations.gov system for the submission and posting of 
public comments in this proceeding. All comments are therefore to be 
submitted electronically through regulations.gov. Specific instructions 
for submitting comments are available on the Copyright Office's website 
at https://copyright.gov/policy/pro-issues/. If electronic comment 
submission is not feasible due to lack of access to a computer or the 
internet, please contact the Copyright Office using the contact 
information below for special instructions.

FOR FURTHER INFORMATION CONTACT: Rhea Efthimiadis, Assistant to the 
General Counsel, by email at [email protected] or telephone at 202-
707-8350.

SUPPLEMENTARY INFORMATION: 

I. Background

a. Public Performance Right for Musical Works and the Formation of PROs

    Musical work copyright owners (e.g., songwriters or music 
publishers) have enjoyed the exclusive right to perform their works 
publicly since 1897.\1\ The variety of ways those works are performed, 
however, has created practical challenges associated with the licensing 
of the right. As one court summarized the issue:
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    \1\ Act of Jan. 6, 1897, ch. 4, 29 Stat. 481; see also 17 U.S.C. 
106(4).

    The users of music, such as theaters, dance halls and bars, were 
so numerous and widespread, and each performance so fleeting an 
occurrence, that no individual copyright owner could negotiate 
licenses with users of his music, or detect unauthorized uses. On 
the other side of the coin, those who wished to perform compositions 
without infringing the copyright were, as a practical matter, unable 
to obtain licenses from the owners of the works they wished to 
perform.\2\
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    \2\ Columbia Broad. Sys., Inc. v. Am. Soc'y of Composers, 
Authors and Publishers (``ASCAP''), 400 F. Supp. 737, 741 (S.D.N.Y. 
1975), rev'd sub nom. Columbia Broad. Sys., Inc. v. ASCAP, 562 F.2d 
130 (2d Cir. 1977), rev'd sub nom. Broad. Music, Inc. (``BMI'') v. 
Columbia Broad. Sys., Inc., 441 U.S. 1 (1979); see also Columbia 
Broad. Sys., Inc., 441 U.S. at 5 (describing how ``as a practical 
matter it was impossible for the many individual copyright owners to 
negotiate with and license [the public performance right to] users 
and to detect unauthorized uses'' of musical works).

    Performing rights organizations (``PROs'') were established to 
address these challenges. Broadly, a PRO contracts with songwriters and 
publishers for the authority to license the public performance rights 
in their musical works, and then provides collective licenses of those 
rights to users, allowing them to publicly perform the works in the 
PRO's repertoire.\3\ Such licenses are significantly more efficient for 
businesses, songwriters, and publishers when compared to song-by-song 
licensing and enforcement.\4\
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    \3\ See Donald S. Passman, All You Need to Know About the Music 
Business 230-31 (11th ed. 2023) (``Passman''); see also Makan 
Delrahim, Ass't Att'y Gen., Antitrust Div., U.S. Dep't of Just., 
Statement of the Dep't of Just. on the Closing of the Antitrust 
Div.'s Rev. of the ASCAP and BMI Consent Decrees 1 (Jan. 15, 2021) 
(``Antitrust 2021 Closing Statement''), http://www.justice.gov/atr/page/file/1355391/dl.
    \4\ See U.S. Copyright Office, Copyright and the Music 
Marketplace 112 (2015) (``Music Marketplace Report''), https://www.copyright.gov/policy/musiclicensingstudy/copyright-and-the-music-marketplace.pdf.
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b. Evolution of the U.S. PRO Market and Their Competition for Members

    After a long period of stability, the number of PROs in the United 
States has increased in recent years. The first U.S. PRO was ASCAP, 
established in 1914, followed by SESAC in 1931 and BMI in 1939.\5\ More 
recently, three new PROs have been formed: Global Music Rights (or 
``GMR'') in 2013, PRO Music Rights in 2018, and AllTrack in 2019.\6\
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    \5\ Since 1941, ASCAP and BMI have been subject to separate 
``consent decrees'' that restrict their licensing practices and 
related operations. See id. at 34-42 (discussing consent decrees). 
The Office notes that the Department of Justice's Antitrust Division 
evaluates and oversees these consent decrees, and antitrust issues 
are outside the scope of this Notice of Inquiry.
    \6\ See Bruce Pollock, A Friend in the Music Business: The ASCAP 
Story 14 (2014) (``Pollock''); BMI, BMI's Timeline Through History, 
https://www.bmi.com/about/history (last visited Jan. 22, 2025); GMR, 
About Us, https://globalmusicrights.com/about (last visited Jan. 22, 
2025); SESAC, About Us, https://www.sesac.com/about/ (noting that 
Paul Heinecke founded SESAC in February 1931) (last visited Jan. 22, 
2025); Marc Schneider, GMR, About Us, https://globalmusicrights.com/about (last visited Jan. 22, 2025); InsideRadio, Upstart Music 
Licensing Company Pro Music Rights Goes Public (July 22, 2022), 
https://www.insideradio.com/free/upstart-music-licensing-company-pro-music-rights-goes-public/article_764bb32e-0987-11ed-9d35-ebdda2accc56.html; see also Pollock at 40 (identifying SESAC's 
founding as 1930); Jason Lipshutz, SESAC at 80, The Hollywood 
Reporter (Apr. 13, 2010), https://www.hollywoodreporter.com/business/business-news/sesac-80-22598/ (noting that ``SESAC was 
founded in 1930 as a means of securing American royalties for 
European publishers,'' but that ``SESAC quickly expanded to include 
American music and began signing songwriters in 1970''). This is not 
necessarily an exhaustive list, including because other PROs have 
ceased operations. See, e.g., Pollock at 7 (noting that the French 
PRO, SACEM, opened a U.S. branch in 1911, but ``failed to generate a 
spark of interest''); Robert Israel Goodman, Comment, Music 
Copyright Associations and the Antitrust Laws, 25 Ind. L.J. 168, 170 
(1950) (referencing former PROs, such as the Society of Jewish 
Composers and Israel Composers, Authors, and Publishers, Inc.).
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    These organizations compete with each other for songwriter and 
publisher members through the license terms and programs they offer.\7\ 
As the Office has previously recognized, ``[s]ongwriters and publishers 
have highlighted the importance of the existence of multiple PROs in 
the music marketplace, indicating that they carefully choose the PRO 
with which they affiliate based on their perception of which 
organization will bring them the most benefit.'' \8\ PROs offer 
different royalty rates to their members based on several factors, 
including: the number of licensees paying royalties; the rates charged 
to those licensees; \9\ the administrative fee charged for the PRO's 
services; the PRO's for-profit or not-for-profit status; \10\ and the 
methodologies used for

[[Page 9255]]

royalty calculations, which may provide higher payments based on the 
relative commercial value of a musical work.\11\
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    \7\ Nonmonetary ways by which PROs may compete include their 
educational, creative, and promotional offerings, such as showcases, 
performance opportunities at festivals and conferences, or panels or 
``songwriting awards, professional workshops, hands-on tutorials, 
and networking events.'' Pollock at 2; BMI, BMI Member FAQs, https://www.bmi.com/faq/category/about (last visited Jan. 22, 2025) 
(discussed under header ``What extra services does BMI offer to 
members?''); see also Susan P. Butler, Collective Rights Management 
Practices Around the World 20-21 (Apr. 2020), https://www.copyright.gov/policy/unclaimed-royalties/cmo-full-report.pdf 
(``Some CMOs [collective rights management organizations, a term 
which includes PROs] perform certain educational activities as ways 
to compete with other CMOs for members or to provide a better 
service to their own members. Some CMOs produce creative conferences 
or host songwriter `camps' to share information or promote creative 
collaborations.'').
    \8\ Letter from U.S. Copyright Office to the Honorable Doug 
Collins, Vice-Chairman, Subcommittee on Courts, Intellectual 
Property and the internet, United States House of Representatives 26 
(Jan. 29, 2016) (``Fractional Licensing Letter''), https://copyright.gov/policy/pro-licensing.pdf.
    \9\ See Passman at 230, 235-36 (discussing PROs bargaining power 
with licensees); William Livingston, General Manager, Gemeny Winery 
and Vineyards LLC, Statement in Response to the Dep't of Just.'s 
Request for Public Comments Concerning the ASCAP and BMI Consent 
Decrees 1 (June 21, 2019), https://media.justice.gov/vod/atr/ascapbmi2019/pc-300.pdf (noting that ``[a]ll three companies `ASCAP, 
BMI and SESAC' give us different rates to pay . . . .''); Ray 
Waddell, The $300 Million Comeback: Irving Azoff Teams With MSG's 
James Dolan to Create Intriguing Music Company, Billboard (Sept. 6, 
2013), https://www.billboard.com/music/music-news/the-300-million-comeback-irving-azoff-teams-with-msgs-james-dolan-to-5687155/ 
(reflecting that SESAC is able to charge higher rates than ASCAP and 
BMI).
    \10\ While both ASCAP and BMI were not-for-profit organizations 
for many decades, ASCAP is now the only PRO operating on a not-for-
profit basis. ASCAP, ASCAP Annual Report 2023 2 (2024), https://
www.ascap.com/~/media/site-pages/annual-report/2023/2023-ascap-
annual-report.pdf; see also Mike O'Neill, Quarterly Distribution 
Update, BMI (Feb. 2023), https://www.bmi.com/distribution/letter/587887 (reflecting BMI's first distribution as a for-profit 
business).
    \11\ See Passman at 234-35 (noting that PROs ``change their 
distribution rules on a regular basis'' and certain performance 
bonuses ``also affect the results'' of those distributions); see 
also, e.g., ASCAP, ASCAP's Survey and Distribution System: Rules & 
Policies (Oct. 2022), https://www.ascap.com/~/media/files/pdf/
members/governing-documents/ascap-survey--distribution-rules--
10322.pdf; BMI, How We Pay Royalties: Live Concert Royalties, 
https://www.bmi.com/creators/royalty/live_concert_royalties (last 
visited Jan. 22, 2025).
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c. PROs' Licensing Practices

    PROs provide licenses for a wide variety of performances, including 
``terrestrial, satellite, and internet radio, on-demand music streaming 
services, website and television uses, . . . bars, restaurants, and 
other commercial establishments, and live performances,'' \12\ as well 
as uses by more niche businesses, such as roller rinks \13\ and laser 
shows.\14\ They generally offer different license rates depending on 
the type of business or use being licensed. ``For example, rates for 
restaurants, nightclubs, bars and similar establishments depend on 
whether the music is live or recorded, [is] audio only or audio visual, 
the number of nights per week music is offered, whether admission is 
charged and several other factors.'' \15\
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    \12\ Music Marketplace Report at 150.
    \13\ ASCAP, ASCAP Music License Agreements and Reporting Forms, 
https://www.ascap.com/music-users/licensefinder (listing twenty-six 
separate license agreements) (last visited Jan. 22, 2025).
    \14\ BMI, Music License Agreements and Reporting Forms, https://www.bmi.com/licensing/forms (listing fifty separate license 
agreements) (last visited Jan. 22, 2025).
    \15\ BMI, Music Licensing FAQs, https://www.bmi.com/licensing/faqs (click on ``Q: How much is a BMI music license and how is that 
fee determined?'') (last visited Jan. 22, 2025).
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    A standard practice for PROs is to offer licenses on a non-
exclusive basis, which means that businesses have the option of 
obtaining performance licenses directly from publisher or songwriter 
copyright owners, although it appears that instances of such direct 
licensing has been infrequent.\16\ Most licensees that contract with 
PROs obtain a blanket license \17\ to all works, or shares of works, in 
the PRO's repertoire.\18\ The royalty fee charged is ``ordinarily a 
percentage of . . . [the licensee's] revenues or a flat dollar 
amount.'' \19\
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    \16\ See BMI v. Pandora Media, Inc., 140 F. Supp. 3d 267, 275 
(S.D.N.Y. 2015).
    \17\ Music Marketplace Report at 33. PROs may offer other 
license types, including per-program or per-segment licenses. Id.
    \18\ A PRO's ``repertoire'' or ``repertory'' is sometimes called 
its ``catalog.'' See GMR, Catalog Homepage, https://globalmusicrights.com/Catalog (last visited Jan. 22, 2025).
    \19\ Columbia Broad. Sys., Inc., 441 U.S. at 5; United States v. 
ASCAP, 627 F.3d 64, 68 (2d Cir. 2010) (``A blanket license is a 
license that gives the licensee the right to perform all of the 
works in the repertory for a single stated fee that does not vary 
depending on how much music from the repertory the licensee actually 
uses.'').
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    As previously described by the Office, ``the practice of licensing 
only partial interests in co-owned works'' is called ``fractional'' 
licensing and stands in contrast to ``100-percent'' licensing, which 
entails ``granting full rights to use a co-owned work based upon a 
partial interest in the work.'' \20\ Because musical works are 
frequently created by multiple authors (i.e., songwriters, including 
composers and lyricists),\21\ co-ownership issues can play an important 
role when licensing musical works. Depending on the circumstances of 
their creation, musical works with multiple authors may be considered 
joint works.\22\ While the default rule is that joint authors own equal 
and undivided interests in a copyright-protected work,\23\ 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.\24\
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    \20\ Fractional Licensing Letter at 1-2.
    \21\ As the Office has previously reported, in addition to 
multiple songwriters who may work on a single work, a ``song may 
incorporate samples of, or remix, preexisting works'' owned by 
additional copyright owners. Id. at 8-9.
    \22\ See id. at 4-8. In some circumstances, the work may be 
considered a derivative work or compilation. Id.
    \23\ 17 U.S.C. 201(a) (``The authors of a joint work are 
coowners of copyright in the work.''); see also Fractional Licensing 
Letter at 6-7 (discussing this topic further).
    \24\ Fractional Licensing Letter at 9. When signing a standard 
publishing contract, a songwriter will ``assign[ ] the entirety of 
his or her copyright interest in a composition or catalog of 
compositions to a publisher in exchange for the publisher's 
administrative services and a share of revenues,'' but the 
songwriter will retain the ability to collect his or her share of 
royalties directly from their chosen PRO. Id. at 11.
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    Fractional licensing is often cited by licensees as a cause of 
administrative frustration and increased costs.\25\ For example, 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.\26\ In that case, the 
entity that intends 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.\27\ Otherwise, that user ``may face infringement liability'' for 
publicly performing the work.\28\
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    \25\ See, e.g., Brief of Television Music License Committee as 
Amici Curiae Supporting Appellant at 28, United States v. BMI, 720 
F. App'x 14 (2d Cir. 2017) (No. 16-3830) (suggesting that fractional 
licensing would be ``costly'' and ``time consuming'' for local 
broadcasters); Brief for Consumer Action and Public Knowledge as 
Amici Curiae Supporting Appellant at 3, United States v. BMI, 720 F. 
App'x 14 (2d Cir. 2017) (No. 16-3830) (stating that fractional 
licensing makes it ``harder and more expensive for music services to 
license songs'').
    \26\ See Fractional Licensing Letter at 10-15.
    \27\ United States v. BMI, 207 F. Supp. 3d 374, 375 (S.D.N.Y. 
2016), aff'd, 720 F. App'x 14 (2d Cir. 2017) (summary order) (``a 
music user, before performing any multi-owner work in a PRO's 
repertory, would need a license to [all] the fractional interests 
held by each of the work's co-owners'').
    \28\ Fractional Licensing Letter at 9; see also Columbia Broad. 
Sys., Inc., 441 U.S. at 18 (``Those who would use copyrighted music 
in public performances must secure consent from the copyright owner 
or be liable at least for the statutory damages for each 
infringement and, if the conduct is willful and for the purpose of 
financial gain, to criminal penalties.'').
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    While the practice of fractional licensing has caused frustrations 
for some licensees, it has encouraged competition among the different 
PROs for songwriters and publishers.\29\ The Office previously noted 
that if PROs were forced to offer 100-percent licenses, doing so 
``would seemingly vitiate important principles of copyright law, 
interfere with creative collaborations among songwriters, negate 
private contracts, . . . impermissibly expand the reach of the consent 
decrees,'' and ``could also severely undermine the efficacy of [PROs]'' 
and their ability to ``grant blanket licenses.'' \30\
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    \29\ Fractional Licensing Letter 19, 23-25.
    \30\ Id. at 3, 13.
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    Information regarding what works are covered by a PRO's blanket 
license is not always publicly available. The largest U.S. PROs do 
publicly disclose the works in their respective repertoires.\31\ For 
example, in 2020, ASCAP and BMI debuted ``SONGVIEW,'' an online ``joint 
song data platform,'' that ``reconcile[s] songwriter and publisher 
information'' between those two PROs.\32\ If a musical

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work's rights are not fully licensed by ASCAP and BMI, SONGVIEW will 
indicate what percentage of rights are outside the control of these two 
PROs and may also indicate which other PROs control the remaining 
rights.\33\ Two other PROs, SESAC and GMR, provide web pages dedicated 
to their respective repertoires along with the option to acquire their 
repertoire information in bulk.\34\
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    \31\ See ASCAP, ASCAP Repertory Search, https://www.ascap.com/repertory (last visited Jan. 22, 2025); BMI, SONGVIEW, https://repertoire.bmi.com/ (last visited Jan. 22, 2025); SESAC, Search 
Repertory, https://www.sesac.com/repertory/ (last visited Jan. 22, 
2025) (including a link to download SESAC's entire repertory); GMR, 
Catalog Homepage, https://globalmusicrights.com/Catalog (last 
visited Jan. 22, 2025); see also GMR, Request Full Catalog, https://globalmusicrights.com/CatalogRequest (last visited Jan. 22, 2025).
    \32\ Ed Christman, Who Owns That Song? ASCAP & BMI's New Joint 
Data Platform Will Tell You, Billboard (Dec. 21, 2020), https://www.billboard.com/pro/ascap-bmi-joint-database-songview/.
    \33\ See Inside Radio, ASCAP, BMI Launch Music Data Platform 
With Copyright Info For Millions of Songs (Dec. 21, 2020), https://www.insideradio.com/free/ascap-bmi-launch-music-data-platform-with-copyright-info-for-millions-of-songs/article_b3e0b200-43ab-11eb-ba27-13dee78eb249.html (``[I]f a song is reconciled in Songview 
between ASCAP and BMI and there are shares from another PRO involved 
in the work, such as SESAC or GMR, then the system will list those 
shares as `Other' or will reflect that the ASCAP and BMI shares 
don't add up to 100%. In addition, writer affiliations are displayed 
and there is also an indication that there are non-ASCAP and BMI 
publishers involved with that work.'').
    \34\ SESAC, Search Repertory, https://www.sesac.com/repertory/ 
(last visited Jan. 22, 2025) (including a link to download SESAC's 
entire repertory); GMR, Catalog Homepage, https://globalmusicrights.com/Catalog (last visited Jan. 22, 2025); GMR, 
Request Full Catalog, https://globalmusicrights.com/CatalogRequest 
(last visited Jan. 22, 2025).
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    Nevertheless, the information in these databases and websites may 
include inaccuracies as a result of changes in the PRO's membership 
\35\ and the fact that some data is provided by third parties, 
including songwriters and publishers.\36\ The largest U.S. PROs 
disclose this fact, disclaiming any guarantees or warranties.\37\ At 
the same time, some PROs represent that they will not bring litigation 
against those relying in good faith on their publicly available 
repertoire data.\38\
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    \35\ Songwriters can leave ASCAP and BMI every two years. ASCAP, 
Compendium of ASCAP Rules and Regulations, and Policies Supplemental 
to the Articles of Association sec. 1.11.1 (Aug. 14, 2023), https://
www.ascap.com/~/media/files/pdf/members/governing-documents/ascap-
compendium.pdf; BMI, Affiliation Agreement Info, https://www.bmi.com/creators/agreement (last visited Jan. 22, 2025).
    \36\ See, e.g., ASCAP, ASCAP Repertory Search--Terms of Use 
Agreement, https://www.ascap.com/help/legal/ace-terms-of-use (noting 
that ``information contained in ASCAP Repertory Search has been 
supplied to ASCAP, and is aggregated from, a variety of third party 
sources'') (last visited Jan. 22, 2025).
    \37\ Id. (noting that information in ASCAP's database ``changes 
on a continual basis, and as with any information database, there 
may be inaccuracies or delays in updating the information'' and 
including a disclaimer related to use of its database); BMI, 
Disclaimer, https://repertoire.bmi.com/Main/DisclaimerOnly (``BMI 
has high confidence in the accuracy of the data we provide, which is 
obtained from rights holders who, as royalty recipients, have every 
incentive to provide reliable data,'' though ``BMI cannot give a 
blanket guarantee regarding the accuracy of the data . . . .'') 
(last visited Jan. 22, 2025); BMI, Terms and Conditions of Use, 
https://www.bmi.com/legal/entry/terms_and_conditions_of_use (noting 
that ``[t]he information contained in the BMI Searchable Song Title 
Databases have been provided to BMI from a variety of sources, and 
BMI makes no warranties or representations whatsoever with respect 
to the accuracy or completeness of the information in the BMI 
Searchable Song Title Databases other than to determine what musical 
compositions are licensed by BMI through the last update'' and ``BMI 
does not warrant or represent that any BMI content that you may 
access at or through a BMI site or service is current, accurate or 
complete'') (last visited Jan. 22, 2025); SESAC, Search Repertory, 
https://www.sesac.com/repertory/ (``As search results will contain 
information provided to SESAC by the songwriters and publishers that 
SESAC represents, SESAC makes no representations and/or warranties 
with respect to the accuracy or completeness of the information 
found within the search results, though SESAC has no reason to 
believe that the information found within the search results is 
inaccurate or incomplete.'' (text displayed in a pop-up window)) 
(last visited Jan. 22, 2025); GMR, Terms of Use, https://globalmusicrights.com/TermsOfUse (``The information contained in the 
[GMR] Database changes on a continual basis, and as with any 
information database, there may be inaccuracies or delays in 
updating the information. Although [GMR] uses reasonable efforts to 
update the [GMR] Database and improve the accuracy of the 
information contained therein, [GMR] makes no guarantees, warranties 
or representations of any kind with regard to and cannot ensure the 
accuracy, completeness, timeliness, quality or reliability of any 
information made available on and through the [GMR] Database.'') 
(last visited Jan. 22, 2025).
    \38\ BMI, Disclaimer, https://repertoire.bmi.com/Main/DisclaimerOnly (``Businesses that take out a BMI license can be 
assured that BMI will not bring an infringement action against a 
licensee that relies on the information contained in the data 
platform. . . . Additionally, BMI will not sue an individual or 
business for infringement for the performance of music in which BMI 
has an interest if, when that music is performed, it was not listed 
in the data platform.'') (last visited Jan. 22, 2025); GMR, Request 
Full Catalog, https://globalmusicrights.com/CatalogRequest (``Global 
Music Rights will not sue anyone for copyright infringement for 
performances of these compositions unless they appear in this 
catalog at the time of performance.'') (last visited Jan. 22, 2025); 
SESAC, Search Repertory, https://www.sesac.com/repertory/ (``SESAC 
uses reasonable efforts to keep the information contained in its 
repertory database current and will grant Users of this Repertory 
Search a forty-five (45) day grace period beginning upon the date 
that a musical work is first posted to SESAC's repertory database to 
obtain from SESAC a license covering the use of that musical work, 
during which forty-five (45) day period SESAC will make no claims of 
copyright infringement against the User; provided, however, that the 
User has acted in good faith and was unaware that the musical work 
is contained within SESAC's repertory.'') (text displayed in a pop-
up window)) (last visited Jan. 22, 2025).
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d. PROs' Usage Tracking and Royalty Distribution Practices

    To accurately distribute royalties, PROs must track the musical 
works performed by their licensees. This may be based on licensee- or 
artist-based reporting (including by providing playlists, program 
guides, cue sheets, or setlists).\39\ It also may involve the PRO's 
monitoring of performances on certain mediums, such as on broadcast or 
cable television or terrestrial or satellite radio.\40\
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    \39\ See, e.g., Bob Kohn, Kohn on Music Licensing 1241-42 (5th 
ed. 2019); Passman at 232-34; ASCAP, ASCAP Payment System: 
Identifying Performances, https://www.ascap.com/help/royalties-and-payment/payment/identifying (last visited Jan. 22, 2025).
    \40\ See Passman at 233-34.
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    In certain circumstances, accurate usage data may be unavailable or 
economically inefficient to obtain. PROs may then rely on proxy data to 
estimate usage.\41\ This proxy data may come from a census (where a 
``complete count[ ] of performances in a medium'' has been made) or 
sample surveys (where the PRO ``tak[es] a representative cross-section 
of the performances on [a] medium'').\42\
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    \41\ Id. at 233; BMI, How We Pay Royalties, https://www.bmi.com/creators/royalty/general_information (``[I]n cases where performance 
data is not available or is incomplete for any of the sources from 
which BMI collects fees, BMI may distribute those fees against 
performances from a source or sources where sufficient data is 
available.) (last visited Jan. 22, 2025).
    \42\ ASCAP, Royalties and Payment: Frequently Asked Questions, 
https://www.ascap.com/help/royalties-and-payment (last visited Jan. 
22, 2025).
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    In addition to the number of times a musical work has been 
performed, other factors affect the royalties that a PRO distributes to 
its members. As noted above, a PRO may charge different rates based on 
the category of use (e.g., terrestrial and satellite radio, television, 
cable, audiovisual streaming services, audio streaming services, 
concert venues, etc.).\43\ Additional distinctions may be made within 
any of these categories of uses, e.g., the royalty for musical works 
performed on a television program may depend on whether the use was on 
local or network television or used as a featured performance, theme 
song, or background music (or underscore).\44\ In some circumstances, 
PROs may also distribute royalty bonuses for hit songs or popular 
standards.\45\
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    \43\ See generally, ASCAP, ASCAP's Survey and Distribution 
System: Rules & Policies (Oct. 2022), https://www.ascap.com/~/media/
files/pdf/members/governing-documents/ascap-survey--distribution-
rules--10322.pdf.
    \44\ Jeffery Brabec & Todd Brabec, Music, Money, and Success: 
The Insider's Guide to Making Money in the Music Business 388-91, 
397-400 (8th ed. 2018) (``Brabec'') (providing an overview of 
television royalty payment formulas for ASCAP and BMI).
    \45\ Id. at 357; see also Passman at 234 (reflecting that PROs 
may pay bonuses for popular songs).
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    With respect to live performances at larger venues, some PROs have 
historically only paid royalties for those musical works performed at 
the top-grossing tours and festivals.\46\ For

[[Page 9257]]

smaller venues, some PROs allow performers to self-report performance 
data, which is used by the PROs to calculate royalty distributions.\47\
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    \46\ Brabec at 394 (noting that ``ASCAP conducts a census survey 
(100% pickup) of all songs performed in the 300 largest concert 
tours and festivals in the United States, as well as all songs at a 
dozen or so selected venues . . . .''); Passman at 234 (``The 
societies pay based on domestic concert performances, but it's only 
for the top three hundred grossing tours and festivals . . . .''); 
see also Jeffery Brabec & Todd Brabec, Music, Money, and Success: 
The Insider's Guide to Making Money in the Music Business 339 (7th 
ed. 2011) (noting that the census survey was formerly of the ``top 
200'' tours and ``eleven major venues'').
    \47\ Brabec at 394 (referencing ASCAP's OnStage program); see 
also BMI, Get Paid for Live Performances with BMI Live, https://www.bmi.com/special/bmi_live (last visited Jan. 22, 2025).
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    PROs have created royalty calculation and distribution policies to 
account for all the elements they consider when paying their 
members.\48\ While some may publish aspects of these policies, 
information regarding any individual PRO's financial operations, 
including license and royalty distribution terms, may not be publicly 
available for competitive reasons.
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    \48\ See, e.g., ASCAP, ASCAP's Survey and Distribution System: 
Rules & Policies (Oct. 2022), https://www.ascap.com/~/media/files/
pdf/members/governing-documents/ascap-survey--distribution-rules--
10322.pdf; BMI, Royalty Information, https://www.bmi.com/creators#royaltyinformation (providing higher-level royalty 
calculation information) (last visited Jan. 22, 2025).
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II. Congressional Request and Subjects of Inquiry

    In September 2024, the Copyright Office received a letter from 
three members of the House Judiciary Committee relaying concerns over 
(1) the increase of PROs and (2) difficulties regarding how to ``assess 
how efficiently PROs are distributing general licensing revenue, based 
on publicly available data.'' \49\ The term ```[g]eneral licensee' is 
an umbrella term referring to the hundreds of thousands of bars, 
restaurants, hotels, ice and roller skating rinks, theme parks and 
other `brick and mortar' businesses . . . that are not TV, radio or 
audio and audio-visual streaming platforms.'' \50\ The letter asked the 
Office to gather information regarding these issues. With this notice, 
the Office is soliciting input to aid Congress's consideration of these 
issues and invites written comments on the subjects of inquiry below.
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    \49\ Letter from Reps. Jordan, Issa, and Fitzgerald to Shira 
Perlmutter, Register of Copyrights, U.S. Copyright Office at 1-2 
(Sept. 11, 2024) (``Congressional Request''), https://www.copyright.gov/policy/pro-issues/letter-to-usco-pro-issues.pdf.
    \50\ ASCAP, Why ASCAP Licenses Bars, Restaurants & Music Venues, 
https://www.ascap.com/help/ascap-licensing/why-ascap-licenses-bars-restaurants-music-venues (last visited Jan. 22, 2025).
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A. The Increase in PROs

    The Congressional Request states that bars, restaurants, stores, 
hotels, and music venues engaged in the public performance of musical 
works ``have reported receiving demands for royalties from new entities 
claiming to represent songwriters, and threatening litigation if the 
demands are not met.'' \51\ It adds that, ``[c]onsidering that the 
possibility of substantial statutory copyright damages poses an 
existential risk for most bars, restaurants, and other small 
businesses, many feel compelled to pay these entities on top of what 
they already pay for blanket licenses from the traditional PROs.'' \52\
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    \51\ Congressional Request at 1-2.
    \52\ Id. at 2.
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    The Office is requesting public comment on the following topics:
    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.

B. General Licensing Revenue Distribution Methods

    With respect to concerns regarding revenue distribution, the 
Congressional Request states that ``it is difficult to assess how 
efficiently PROs are distributing general licensing revenue based on 
publicly available data,'' including ``how accurately lesser known and 
independent artists as well as smaller publishers are being compensated 
compared to widely popular artists and major publishers.'' \53\
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    \53\ Id.
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    The Office is requesting public comment on the following topics:
    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); and
    (b) royalty distribution practices and policies;
    7. Whether any gaps or discrepancies occur in royalty 
distributions, including circumstances where it is likely for 
performance data to be unavailable or incomplete and where PROs must 
rely on proxy or survey data for royalty distributions;
    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.

    Dated: February 5, 2025.
Suzanne V. Wilson,
General Counsel and Associate Register of Copyrights.
[FR Doc. 2025-02418 Filed 2-7-25; 8:45 am]
BILLING CODE 1410-30-P
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