US Copyright Office Issues Call for Human Rights Organizations

US Copyright Office Investigation

The US Copyright Office (USCO) has initiated an investigation into organizations aimed at safeguarding efficiency rights within the United States. This initiative seeks to address “questions related to the increase in the number of professionals and the practice of distributing licensing income.”

Call for Public Input

USCO launched a call for written representations from the public regarding professionals. This follows a letter sent by members of the Judicial Committee of the House of Representatives to the copyright office in September of last year.

The letter raised concerns about the growing number of professionals in the United States and the challenges enterprises face in licensing music, primarily due to the necessity of signing agreements with multiple organizations.

It also highlighted issues regarding transparency among professionals, particularly concerning the unfair distribution of fees to some artists and songwriters, leading to potential loss of income from high administrative costs.

A letter from American representatives, Jim Jordan, Darrell Issa, and Scott Fitzgerald, all Republicans, indicated that ordinary businesses that publicly play music—such as restaurants, bars, shops, hotels, and music venues—“have reported receiving royalty demands from new organizations claiming to represent song authors, and threatening lawsuits if the demands are not met.”

They added: “Given that the potential for significant legislative harm related to copyright poses an existential risk for most bars, restaurants, and other small businesses, many feel compelled to comply with these organizations on top of the fees they already pay for standard licenses from established professionals.”

USCO considers six organizations in the USA: Ascap, Cesak, and Imt—the traditional organizations operating in the USA—along with three relatively new entities: Global Musical Rights (GMR), Pro Music Rights, and Alltracks, all established within the last 12 years.

“(Places) reported receiving demands for royalties from new organizations claiming to represent song authors and threatening legal action if the requirements are not fulfilled.”

Letter from representatives of the Committee on the Judicial Authorities to USCO

While Ascap is the oldest and among the largest nonprofit organizations in the USA, others operate as commercial entities. This shift towards commercialization is illustrated by BMI transitioning to a for-profit model in 2022, followed by acquisition by a private investment firm, New Mountain Capital, in 2023.

In anticipation of this acquisition, BMI announced a reduction in the percentage of its collections distributed to rights holders from 90% to 85%.

Another sign of the growing commercialization of these organizations came last year when a private equity firm, Hellman and Friedman, showed interest in purchasing Irving Azoff‘s GMR, valuing the royalty collection organization at 3.3 billion dollars.

Aside from the uncertainty faced by enterprises unsure if they possess all necessary licenses for music play, issues of transparency and fairness in collections and payments also arise. “It is challenging to assess how effectively professionals distribute general licensing income based on public data,” the letter from House Representatives to USCO stated.

The letter further queried, “how exactly less well-known and independent artists, as well as smaller publishers, receive compensation in comparison to widely popular artists and large publishers.”

A significant part of the issue appears to be that, operating as commercial entities, professionals are required to keep certain financial information private “for competitive reasons,” as noted by USCO.

The shift of BMI to a commercial model exemplifies this context. In 2023, following its transition, Billboard reported that “for the first time since its inception, the BMI financial report for the prior year is unlikely to disclose any financial data.”

This lack of transparency has raised concerns even among prominent industry groups. Last year, David Israel, President and Chief Executive Officer of the National Association of Musical Publishers (NMPA), noted that while the non-profit ASCAP “provides a relatively close look at fee management,” similar information has not been forthcoming from BMI.

USCO has set a deadline of April 11, 2025, for submissions of written materials for the investigation of professionals. Written responses to the call for representations will be accepted until May 27, 2025.