TOPLINE
B
y the end of this year, performing rights organizations could
find themselves with the most negotiating power they have
had since 1941 — or the biggest lobbying fight of their lives
on Capitol Hill. In the next few months, the Department of
Justice (DOJ) will decide whether the consent decrees governing
PROs ASCAP and BMI should be changed, left alone or perhaps
even “sunsetted” — terminated at a future date.
ASCAP and BMI would like to see the decrees terminated,
since that would let them negotiate more aggressively on behalf
of publishers and songwriters, plus let them compete on an even
playing field against their rivals, SESAC and Global Music Rights
(GMR), which aren’t subject to such regulation. It’s more likely that
the decrees will be changed. But it’s also possible that either result
might not even help the music business.
Two years ago, the last review of the decrees, undertaken at the
behest of publishers, nearly ended in 100% licensing, meaning
that licensees would only need to go to one rights holder per song,
creating the possibility that they would choose the source that
offered the lowest fees and reducing royalties as a result.
There’s also the chance that the termination of the consent
decrees will inspire Congress to pass legislation to regulate public
performance organizations in much the same way the consent
decrees do. The National Association of Broadcasters, which
opposes terminating the decrees, already has said that if they are
eliminated, it wants Congress to act. Although it’s always difficult to
get legislation passed, especially in a divided Congress, any conflict
with the NAB would disadvantage the music industry, since the
radio and restaurant businesses wield influence in far more districts
than songwriters do.
If the decrees are terminated, ASCAP and BMI could change the
way they operate to make themselves more competitive: They could
ask for exclusive licenses from songwriters, no longer accept every
creator and form an invite-only subset of writers to compete with the
lucrative deals that SESAC and GMR are offering.
Most publishers want the consent decrees updated, if not
eliminated entirely, but there’s not much agreement on how. Sources
say the National Music Publishers’ Association and the three major
publishers are asking the DOJ to allow partial withdrawals from
the blanket licenses so they can do direct multirights deals when
it’s to their benefit but still be allowed to take advantage of the
blanket license to deal with clubs, restaurants, retailers and other
venues. The songwriting trade groups have divergent views, too.
Both the Songwriters Guild of America and the Music Creators of
North America say they can abide partial withdrawals — but only
if publishers agree to have PROs administer the royalties from
direct deals. The Nashville Songwriters Association International
advocates a more cautious approach to change.
Any push for legislation could be a double-edged sword for both
sides. “If they move to bring legislation into play, the NAB knows
there is no justification for radio to be exempt from paying royalties
on sound recordings,” says one senior music executive.
In the end, the simplest outcome would arrive through
negotiation, which could form the basis for a future law. But there’s
no telling what that outcome would be. As one music publishing
leader puts it bluntly, “This process could result in something really
good, really bad or nothing at all.”
22 BILLBOARD | AUGUST 24 , 2 019
Live Nation Goes To Mexico
BY ED CHRISTMAN
I
N LATE JULY, LIVE NATION
announced that it intends to acquire
a controlling stake in the Mexican
concert promoter OCESA from Grupo
Televisa and Corporacion Interamericana
de Entretenimiento in a $445 million deal
that could change the North American
touring business.
Control over OCESA would strengthen
Live Nation’s lock on North America, giving
it a touring map that stretches 5,500 miles,
from the Mile One Centre in St. John’s,
Newfoundland, to the Estadio Beto Avila in
Cancún, Mexico.
Now the deal needs approval from
regulators in the United States, Mexico
and Colombia, where OCESA’s South
American headquarters are located. The
U.S. Department of Justice’s antitrust
division has yet to block a Live Nation
acquisition, however, and since Live
Nation and OCESA have co-promoted
concerts for a decade, the deal would
change little in the short term.
The ticketing business in Mexico could
undergo major changes, though, if Live
Nation’s Ticketmaster takes control of
Ticketmaster Mexico, of which it now
owns just one-third. (Ticketmaster
Mexico has operated like a franchise
since 1991, licensing its parent company’s
technology to the brands Venta de Boletos
por Computadora and ETK Boletos.)
Mexico has become one of the strongest
live-music markets in the world: The
country’s 129 million residents bought
37 million tickets from Ticketmaster Mexico
in 2018, and venues like Auditorio Nacional
in Mexico City frequently top Billboard
Boxscore’s venues chart. The OCESA
transaction would position Ticketmaster
for rapid growth in Mexico, especially when
it comes to its data strategy. “Ticketmaster
has a wealth of data on its customers, but
as a licensee, Ticketmaster Mexico may not
have that same flexibility to share data,”
says Gigi Johnson, founder of the Center
for Music Innovation at the University of
California, Los Angeles. “Having all of
the data under the same hood would
allow Ticketmaster to gain a massive
competitive advantage fairly quickly.”
What Ticketmaster sees as an advantage
could be an issue for regulators, however.
Live Nation’s purchase would follow the
close of a two-year antitrust inquiry by
Mexico’s Federal Competition Commission,
which resulted in a settlement barring
Live Nation from forcing venues to
exclusively license Ticketmaster software.
(Ticketmaster can still pay advances in
exchange for exclusivity.)
The Mexican settlement took effect
toward the end of the term of the U.S.
settlement that Live Nation made in 2010,
when it merged with Ticketmaster — which
bars the company from withholding shows
from venues that use other ticket vendors.
It expires in January 2020, at a time when
regulators, politicians and even presidential
candidates are taking a greater interest
in competition policy — especially in the
technology business. In July, Rep. Bill
Pascrell, D-N.J., called for the breakup of
Live Nation, testifying before the House
Committee on Energy and Commerce that
“they have sway over everything, including
the peanuts you buy,” and criticizing the
2010 consent decree as ineffective.
Ticketmaster now has a larger share
of the ticketing market than it
did 10 years ago, thanks to Live
Nation’s dominance of the concert
pipeline and its acquisitions of
independent promoters. So far, at
least, other ticketing companies
have had a hard time executing
consistently at an arena-level
scale. “Ticketmaster executives
don’t like to gloat when one of
their competitors has problems
— it looks bad to regulators,” says
one high-level ticketing executive.
“Instead they just shrug their
shoulders and say something
like, ‘Ticketing is hard.’ ”
BY DAVE BROOKS
The concert giant plans to acquire a controlling stake in OCESA.
Will regulators on both sides of the border approve?
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of OCESA’s top-
grossing shows of the
past year, according
to Billboard Boxscore.
Consent Decree
Review Moving Fast
“This process could result in something
really good, really bad or nothing at all,”
says a publishing-side executive
The Department
of Justice in
Washington, D.C.