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Music Licensing Reform: Singing the Same Old Song

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Lenard and White argue in Regulation that Congress should change its tune and empower market forces

June 28, 2018 – Congress is missing opportunities to enact pro-competitive music licensing reforms, according to TPI Senior Fellow and President Emeritus Thomas Lenard and NYU Stern School economics professor Lawrence J. White. Drs. Lenard and White’s article appears in the summer 2018 issue of Regulation.

‘There have been some recent efforts to modernize music licensing,” Drs. Lenard and White write. “But all too often these efforts fall back on more regulation rather than a greater reliance on market processes. They are just slightly newer choruses of the same old song.”

The most recent attempt at reforming music licensing is the Music Modernization Act, now pending in Congress. While the MMA would help ensure that music publishers and songwriters are appropriately paid, it also falls back on the traditional regulatory model including compulsory licensing and regulated rates. The MMA “does little to create a more competitive licensing regime with more direct negotiation between rights holders and licensees, which should be the long-run goal.”

Pointing to numerous examples of successful, direct negotiations in this otherwise highly regulated sector, Lenard and White argue that, “The goal of more competition is attainable.”

“The current highly regulated system for licensing music is largely an artifact of the analog era,” according to Lenard and White. “The digital technologies now available make it possible for competition to replace much of the traditional regulatory structure for music licensing and rate determination.” But, “this won’t happen until lawmakers sing a different song.”

The summer 2018 issue of Regulation is available now.

 

Press Contact: Chris McGurn, 202-828-4405, cmcgurn@techpolicyinstitute.org

The Technology Policy Institute

The Technology Policy Institute is a non-profit research and educational organization that focuses on the economics of innovation, technological change, and related regulation in the United States and around the world. More information is available at www.techpolicyinstitute.org/.