MUSIC LICENSING UNDER TITLE 17 (PART I & II) HEARING BEFORE THE SUBCOMMITTEE ON COURTS, INTELLECTUAL PROPERTY, AND THE INTERNET OF THE COMMITTEE ON THE JUDICIARY HOUSE OF REPRESENTATIVES ONE HUNDRED THIRTEENTH CONGRESS SECOND SESSION JUNE 10 AND JUNE 25, 2014 Serial No. 113–105 Printed for the use of the Committee on the Judiciary ( Available via the World Wide Web: http://judiciary.house.gov MUSIC LICENSING UNDER TITLE 17 (PART I & II) MUSIC LICENSING UNDER TITLE 17 (PART I & II) HEARING BEFORE THE SUBCOMMITTEE ON COURTS, INTELLECTUAL PROPERTY, AND THE INTERNET OF THE COMMITTEE ON THE JUDICIARY HOUSE OF REPRESENTATIVES ONE HUNDRED THIRTEENTH CONGRESS SECOND SESSION JUNE 10 AND JUNE 25, 2014 Serial No. 113–105 Printed for the use of the Committee on the Judiciary ( Available via the World Wide Web: http://judiciary.house.gov U.S. GOVERNMENT PRINTING OFFICE 88–240 PDF WASHINGTON : 2014 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001 COMMITTEE ON THE JUDICIARY BOB GOODLATTE, Virginia, Chairman F. JAMES SENSENBRENNER, JR., JOHN CONYERS, JR., Michigan Wisconsin JERROLD NADLER, New York HOWARD COBLE, North Carolina ROBERT C. ‘‘BOBBY’’ SCOTT, Virginia LAMAR SMITH, Texas ZOE LOFGREN, California STEVE CHABOT, Ohio SHEILA JACKSON LEE, Texas SPENCER BACHUS, Alabama STEVE COHEN, Tennessee DARRELL E. ISSA, California HENRY C. ‘‘HANK’’ JOHNSON, JR., J. RANDY FORBES, Virginia Georgia STEVE KING, Iowa PEDRO R. PIERLUISI, Puerto Rico TRENT FRANKS, Arizona JUDY CHU, California LOUIE GOHMERT, Texas TED DEUTCH, Florida JIM JORDAN, Ohio LUIS V. GUTIERREZ, Illinois TED POE, Texas KAREN BASS, California JASON CHAFFETZ, Utah CEDRIC RICHMOND, Louisiana TOM MARINO, Pennsylvania SUZAN DelBENE, Washington TREY GOWDY, South Carolina JOE GARCIA, Florida RAU´ L LABRADOR, Idaho HAKEEM JEFFRIES, New York BLAKE FARENTHOLD, Texas DAVID N. CICILLINE, Rhode Island GEORGE HOLDING, North Carolina DOUG COLLINS, Georgia RON DeSANTIS, Florida JASON T. SMITH, Missouri [Vacant] SHELLEY HUSBAND, Chief of Staff & General Counsel PERRY APELBAUM, Minority Staff Director & Chief Counsel SUBCOMMITTEE ON COURTS, INTELLECTUAL PROPERTY, AND THE INTERNET HOWARD COBLE, North Carolina, Chairman TOM MARINO, Pennsylvania, Vice-Chairman F. JAMES SENSENBRENNER, JR., JERROLD NADLER, New York Wisconsin JOHN CONYERS, JR., Michigan LAMAR SMITH, Texas JUDY CHU, California STEVE CHABOT, Ohio TED DEUTCH, Florida DARRELL E. ISSA, California KAREN BASS, California TED POE, Texas CEDRIC RICHMOND, Louisiana JASON CHAFFETZ, Utah SUZAN DelBENE, Washington BLAKE FARENTHOLD, Texas HAKEEM JEFFRIES, New York GEORGE HOLDING, North Carolina DAVID N. CICILLINE, Rhode Island DOUG COLLINS, Georgia ZOE LOFGREN, California RON DeSANTIS, Florida SHEILA JACKSON LEE, Texas JASON T. SMITH, Missouri STEVE COHEN, Tennessee [Vacant] JOE KEELEY, Chief Counsel HEATHER SAWYER, Minority Counsel (II) C O N T E N T S JUNE 5, 2014 Page HEARINGS Tuesday, June 10, 2014 Music Licensing Under Title 17 (Part I) ............................................................ 1 Wednesday, June 25, 2014 Music Licensing Under Title 17 (Part II) ........................................................... 231 OPENING STATEMENTS The Honorable Howard Coble, a Representative in Congress from the State of North Carolina, and Chairman, Subcommittee on Courts, Intellectual Property, and the Internet .................................................................................. 1 The Honorable John Conyers, Jr., a Representative in Congress from the State of Michigan, Ranking Member, Committee on the Judiciary, and Member, Subcommittee on Courts, Intellectual Property, and the Internet .. 2 The Honorable Bob Goodlatte, a Representative in Congress from the State of Virginia, and Chairman, Committee on the Judiciary ................................. 3 The Honorable Jerrold Nadler, a Representative in Congress from the State of New York, and Ranking Member, Subcommittee on Courts, Intellectual Property, and the Internet .................................................................................. 3 WITNESSES Neil Portnow, President/CEO, The Recording Academy Oral Testimony ..................................................................................................... 7 Prepared Statement ............................................................................................. 10 Lee Thomas Miller, Songwriter and President, Nashville Songwriters Associa- tion International Oral Testimony ..................................................................................................... 16 Prepared Statement ............................................................................................. 18 David M. Israelite, President and Chief Executive Officer, National Music Publishers’ Association Oral Testimony ..................................................................................................... 21 Prepared Statement ............................................................................................. 23 Lee Knife, Executive Director, Digital Media Association (DiMA) Oral Testimony ..................................................................................................... 34 Prepared Statement ............................................................................................. 37 Michael O’Neill, Chief Executive Officer, Broadcast Music, Inc. (BMI) Oral Testimony ..................................................................................................... 42 Prepared Statement ............................................................................................. 44 Will Hoyt, Executive Director, Television Music License Committee Oral Testimony ..................................................................................................... 61 Prepared Statement ............................................................................................. 63 Jim Griffin, Managing Director, OneHouse LLC Oral Testimony ..................................................................................................... 71 Prepared Statement ............................................................................................. 73 SUBMISSIONS FOR THE RECORD Material submitted for the Hearing Record .......................................................... 107 (III) MUSIC LICENSING UNDER TITLE 17 (PART I) TUESDAY, JUNE 10, 2014 HOUSE OF REPRESENTATIVES SUBCOMMITTEE ON COURTS, INTELLECTUAL PROPERTY, AND THE INTERNET COMMITTEE ON THE JUDICIARY Washington, DC. The Subcommittee met, pursuant to call, at 10 a.m., in room 2141, Rayburn House Office Building, the Honorable Howard Coble, (Chairman of the Subcommittee) presiding. Present: Representatives Coble, Goodlatte, Marino, Smith of Texas, Chabot, Issa, Poe, Chaffetz, Farenthold, Holding, Collins, Nadler, Conyers, Chu, Deutch, Bass, DelBene, Jeffries, Cicilline, Lofgren, Jackson Lee, and Cohen. Staff Present: (Majority) Joe Keeley, Subcommittee Chief Coun- sel; Olivia Lee, Clerk; (Minority) Heather Sawyer, Minority Coun- sel; and Jason Everett, Counsel. Mr. COBLE. Good morning, ladies and gentlemen. Welcome to the first of two hearings on music licensing issues. Probably everyone here knows that I am an avid bluegrass fan, and country music, as long as it is old-time country. I am dating myself chronologically when I say that. I know that many of you will welcome our new and veteran witnesses today. Although every industry goes through changes over the years, I think everyone would agree that the music business has seen more than its share of changes over the past decade or two. Many of us grew up in a world where we looked forward to buying our favorite albums at the local record store. Today’s youth may not even know what a record store looks like, since they prefer to download from iTunes or stream it on Pandora. However, times change, and I am glad to see that the music in- dustry continues to adapt to the preferences of its fans and making new music available. However, the current licensing system hasn’t changed. Many feel that our music licensing laws were designed for a world that existed decades ago and have become outdated. Music lovers can now access music virtually anywhere on an ever-chang- ing variety of devices. I may be old—I am old—but I am also old-fashioned in my view our copyright laws should provide access to music and still protect the interest of copyright holders. This is a traditional view of com- pulsory licenses, and I see no reason why we cannot restore this (1) 2 balance. If not, we know consumers will resort to pirate sites on the Internet for their respective music. Finally, there are some longstanding issues in the music busi- ness that I feel are important for Congress to address, how royalty rates are determined, who pays music royalties, and how older music works are treated under Federal copyright law. I have also been a friend of broadcasters for some time, and I hope that the broadcasters and the music industry can find a way to work together to resolve their common issues. In closing, I did want to thank our panel this morning for mak- ing time available for this hearing. While I would prefer to spend the next few hours learning about how to make bluegrass music more popular, I will instead spend the next few hours learning about how to make all music more popular. Again, I thank you, the panelists,