Appeals Court Upholds Fractional Licensing For Composers

The U.S. Second Circuit Court of Appeals on Tuesday ruled against the U.S. Department of Justice and affirmed BMI’s 2016 consent decree victory, which allows for the practice of fractional licensing.

In other words, parties seeking to use songs written by multiple songwriters must obtain a license from all of the songwriters, or their representatives. Previously, the DOJ had ruled that the consent decree called for “full-works” or 100% licensing, whereby a user was required to obtain a license from only one of the songwriters.

The performing rights organizations were quick to issue statements applauding the decision.

In response to Tuesday's decision by the Second Circuit Court of Appeals that allows BMI to engage in fractional licensing, NAB Executive Vice President of Communications Dennis Wharton issued the following statement:

“NAB is extremely disappointed with the court’s decision allowing fractional licensing of BMI songs played on radio and television stations, as well as in countless venues across America. If sustained, this decision could disrupt the music licensing marketplace and impede the delivery of music to listeners and viewers, resulting in less airplay for their favorite songs.

"For decades, NAB and BMI have had a mutually beneficial relationship that has benefited songwriters, broadcasters and tens of millions of listeners who enjoy hearing their favorite songs on free and local radio and television. We look forwarding to finding common ground with our songwriter friends to continue that partnership.”

“This is a massive victory for songwriters, composers, music publishers and the entire industry,” said BMI president Mike O’Neill. “We have said from the very beginning that BMI’s consent decree allowed for fractional licensing, and we are incredibly gratified that Judge Stanton and the Second Circuit agreed with our position. We thank all the songwriters, composers, publishers and organizations who supported us throughout this process, which unfortunately, has been a nearly two-year distraction from our original intent which was to update our outdated consent decree and modernize music licensing. We look forward to our continued efforts to protect and grow the value of music.”

“The Second Circuit’s ruling today is an important victory for music creators across the country,” ASCAP CEO Elizabeth Matthews said. “The Court affirms what we have known all along, that the right of public performance allows for the fractional licensing of musical works in our repertories, and the consent decrees do not limit that right. ASCAP and BMI can now continue to offer blanket licenses to our hundreds of thousands of licensees that contain all the shares of works that are in our repertories and the livelihoods of our 650,000 ASCAP songwriter, composer and publisher members can continue to depend on a strong collective licensing system. ASCAP remains committed to making music licensing more efficient, effective and transparent for today’s digital music marketplace.”