Using an open letter by Motown legend Stevie Wonder as a springboard, former PRO employee-turned Radio Music License Committee executive director Bill Velez submitted an editorial to Billboard recently to express his own take on music licensing. But where that earlier opinion by Wonder hoped for a mutually amenable arrangement between PROs and independent broadcasters (Wonder is both a songwriter and the owner of a radio station), Velez twists the theme of the music genius's open letter to serve his own ends. Velez's perspective comes loaded with a pointed agenda that Broadcast Music, Inc. (BMI) flatly disagrees with.
While Velez correctly echoes Wonder's claim that it's unfair that two of the four PROs operating in the U.S. are subject to Department of Justice regulation and two are not (neither SESAC nor GMR are beholden to consent decrees), his blanket assertion that PROs "will inevitably engage in anti-competitive behavior" goes too far. It may have sounded like a provocative flourish, but the statement is frankly false and defamatory.
By suggesting that BMI has or would violate antitrust laws, Velez is propagating a lie. BMI has never once been found to engage in any anti-competitive behavior, broken any antitrust law or been in violation of its faithfully-upheld consent decree in any manner throughout its 76-year history, a fact Velez well knows, but one he conveniently fails to mention, as it doesn't fit his narrative.
It's a convenient talking point to further convey his assertion that the music licensing system is a "quagmire." It's imperative to note that Velez is engaging in posturing from the top of an organization that is currently negotiating and/or litigating with three out of the four PROs, and one that seems determined to avoid free market negotiations at all costs. This position is odd, however, given that three of the RMLC's largest members negotiated their own deals with GMR and/or SESAC.
Velez then advocates for what he calls a "single pay structure," a shortsighted licensing reform that might seem to make sense on paper, but that would overwhelmingly benefit music users and shortchange songwriters, the community whose product is the foundation of his entire industry. It's also a proposal that disregards the different positions of each PRO, lumping regulated entities with non-regulated entities; fees set through rate courts and arbitrations with free market negotiations; and suggesting the industry come up with a synthesized rate for all. It's an absurd notion that not only hurts songwriters -- the ultimate small business owners -- but is simply bad business.
Acknowledging that he's not authorized to speak on behalf of the radio industry, Velez nevertheless recommends a "major league overhaul and simplification of the existing music licensing morass" via locking competitors in a room until they reach what he would consider a "sensible" fee. He presents that as an easy solution, but it flies squarely in the face of the ideal of the free market determining value. Ironically, the industry-wide agreement on fees that Velez advocates is itself, likely, anticompetitive.
With the interest of our wide affiliation of songwriters, composers and music publishers top of mind, BMI is firmly committed to the fairness of our licensing practices and proud of our untarnished track record.
Mike Steinberg is the senior vp, licensing at BMI. This post is in response to a guest post penned by Radio Music License Committee executive director Bill Velez, which itself was a response to an op-ed by Stevie Wonder that originally appeared in the Feb. 18, 2017 issue of Billboard.