Music Licensing & Royalties — Mechanical, Performance, and Streaming Rights
Every commercially released song in the U.S. involves two separate and independent copyrights — the musical composition (the melody and lyrics, owned by the songwriter and music publisher) and the sound recording (the specific recorded performance, owned by the record label or artist who funded the recording). For the foundational copyright law these rights are built on, see copyright law. Each copyright has its own licensing system, its own royalty rates, and its own collecting organization. The result is one of the most complex licensing frameworks in intellectual property law, governing a $10+ billion annual royalty flow that reaches every streaming service, radio station, concert venue, restaurant, and retail store that plays music in the United States. The foundational statutes are 17 U.S.C. §§ 114–115 (sound recording and musical composition licenses) and 17 U.S.C. Chapter 8 (Copyright Royalty Board), as significantly reformed by the Music Modernization Act of 2018 (MMA) — the most comprehensive overhaul of music copyright in decades. The MMA created the Mechanical Licensing Collective (MLC) to administer a new blanket mechanical license for digital streaming, granted federal copyright protection to pre-1972 recordings for the first time, and changed the standard under which the Copyright Royalty Board (CRB) sets songwriter royalty rates — from a "willing buyer/willing seller" standard that systematically underpaid songwriters to a standard that gives songwriters equal consideration with other stakeholders.
Current Law (2026)
| Parameter | Value |
|---|---|
| Musical composition copyright | Songwriter + publisher; covers reproduction, distribution, public performance |
| Sound recording copyright | Record label or artist; covers digital performance rights (limited) |
| Mechanical royalty rate | 9.1 cents/copy (physical) or 1.75 cents/minute (albums); streaming rates set by CRB Phonorecords IV |
| Digital performance royalty | Set by CRB in Web IV proceeding; paid to SoundExchange for non-interactive streaming |
| Interactive streaming | Licensed directly (or via MLC for mechanical + PRO for performance) |
| Blanket mechanical license | Administered by MLC (Mechanical Licensing Collective) per 17 U.S.C. § 115(e) |
| Performance rights | ASCAP, BMI, SESAC, GMR collect and distribute on behalf of songwriters/publishers |
| Sound recording performance | SoundExchange distributes digital performance royalties to labels (45%) and featured artists (45%), non-featured artists (fund) |
| Pre-1972 recordings | Now covered federally (MMA 2018); protected under CLASSICS Act provisions |
| CRB rate proceedings | Every 5 years; binding on all parties who do not directly negotiate |
Legal Authority
- 17 U.S.C. § 114 — Scope of exclusive rights in sound recordings (sound recordings have limited performance rights: the exclusive right to digital performance — not terrestrial radio broadcast, which is exempt; non-interactive digital services [Pandora, SiriusXM, webcasters] must pay statutory royalties set by CRB; interactive services [Spotify, Apple Music] must negotiate or pay rates set under § 115; establishes SoundExchange as the designated agent for collecting and distributing these royalties)
- 17 U.S.C. § 115 — Scope of exclusive rights in nondramatic musical works — compulsory mechanical license (once a song has been commercially released, any person may make a cover recording and distribute it by paying the statutory mechanical royalty rate; the Music Modernization Act added § 115(e) creating a blanket license for digital streaming services administered by the MLC, replacing the prior song-by-song licensing requirement that made digital licensing nearly impossible at scale)
- 17 U.S.C. § 116 — Negotiated licenses for public performances by means of coin-operated phonorecord players (jukeboxes) — largely historical but establishing the compulsory license framework precedent
- 17 U.S.C. § 801 — Copyright Royalty Judges (three judges appointed by the Librarian of Congress for 6-year terms; conduct rate-setting proceedings for mechanical royalties, digital performance royalties, cable compulsory licenses, and satellite radio licenses; decisions published in the Federal Register and codified in 37 CFR)
- 17 U.S.C. § 802 — Proceedings of Copyright Royalty Judges (parties may participate in CRB proceedings; decisions final unless appealed to the D.C. Circuit; judges must apply the willing buyer/willing seller standard for digital performance royalties, and a different standard — set by the MMA — for musical composition mechanical royalties that gives equal weight to the interests of copyright owners [songwriters] and licensees [streaming services])
- 17 U.S.C. § 803 — Determinations and adjustments (CRB rate determinations take effect on dates specified; parties must implement new rates within 30 days; late-payment penalties; confidential financial data submitted to CRB protected from public disclosure)
- 17 U.S.C. § 804 — Institution of proceedings (any party may petition the CRB to adjust rates; CRB initiates proceedings on a 5-year cycle for each royalty category regardless of petitions)
- 17 U.S.C. § 115(e) — Blanket license (the MMA's centerpiece; digital music providers may obtain a blanket license from the MLC authorizing reproduction and distribution of all compositions in the MLC's catalog; the MLC maintains a public database of musical works and sound recording matches; unmatched royalties held for 3 years then distributed to known rightsholders; streaming services must report detailed usage data monthly to the MLC)
How It Works
Every time a song plays, two separate copyrights are implicated:
- Musical composition: The songwriter and publisher earn royalties for the underlying melody and lyrics — for a cover or reproduction (mechanical royalty) and for public performance (performance royalty).
- Sound recording: The record label and recording artist earn royalties for the specific recording — but only for certain digital performances, not for AM/FM radio broadcast (a major asymmetry that the U.S. has never resolved despite international pressure).
A single Spotify stream triggers: (1) a mechanical royalty to the songwriter/publisher via the MLC, (2) a performance royalty to the songwriter/publisher via their PRO (ASCAP, BMI, or SESAC), and (3) a sound recording royalty to the label/artist via the master recording license negotiated with Spotify.
A mechanical royalty is paid whenever a song is reproduced — the term dates to player piano rolls, the original mechanical reproduction. For physical CDs and vinyl, the statutory rate is 9.1 cents per copy for songs under 5 minutes (1.75 cents/minute over 5 minutes), a rate that has barely changed in decades. For digital downloads, the same rate applies. For interactive streaming (Spotify, Apple Music), mechanical royalties are calculated per-stream or by minimum-per-subscriber formulas set by the Copyright Royalty Board in its "Phonorecords" proceedings; Phonorecords IV (covering 2023–2027) raised songwriter shares to approximately 15.1% of total content costs by 2027.
Prior to the MMA, getting a mechanical license for digital streaming required individual song-by-song licenses from each publisher — an impossible task at the billions-of-songs scale of modern streaming. The Mechanical Licensing Collective (MLC), created by the MMA and operational since January 2021, solves this: streaming services pay one license fee to the MLC, which distributes to publishers and songwriters based on usage data the services report.
Every public performance of a song — radio broadcast, concert, streaming, restaurant background music, on-hold telephone music — requires a public performance license for the musical composition. The Performing Rights Organizations (PROs) — ASCAP, BMI, SESAC, and Global Music Rights (GMR) — collect blanket license fees from radio stations, streaming services, venues, restaurants, hotels, and other music users, and distribute the revenue to their member songwriters and publishers.
- ASCAP: American Society of Composers, Authors and Publishers — non-profit; member-governed; approximately 1 million members; operated under DOJ consent decree from 1941
- BMI: Broadcast Music Inc. — non-profit structure; approximately 1.3 million affiliates; operated under DOJ consent decree from 1941; in 2022 BMI converted to a for-profit company, exiting the consent decree framework (still subject to antitrust scrutiny but no longer under formal decree)
- SESAC: smaller, for-profit, invitation-only organization; not under a consent decree; represents select roster of prominent writers
- GMR: Global Music Rights — smallest, invitation-only, represents select premium songwriters (Bruce Springsteen, John Lennon catalog, etc.)
ASCAP and BMI consent decrees (and their replacements for BMI post-2022) govern how these organizations may license music, require them to offer licenses at reasonable fees, and give users the right to request a "rate court" determination of a reasonable fee if they cannot agree with the PRO.
While AM/FM radio can play any sound recording without paying the record label, digital performance of sound recordings triggers two categories of royalties:
- Non-interactive digital (§ 114): Internet radio, satellite radio (SiriusXM), Pandora's free tier — these are "non-interactive" because the user cannot choose specific songs. CRB sets the rate in its "Web" proceedings (Web IV covers 2021–2025). Services pay a per-play rate to SoundExchange, which distributes 50% to the copyright owner (record label), 45% to the featured artist, and 5% to a fund for non-featured session musicians and vocalists.
- Interactive streaming (§ 115): Spotify, Apple Music, Tidal — these are licensed directly between the platform and the record label (not through CRB or SoundExchange). Major labels negotiate substantial minimum guarantees and per-stream rates.
The United States is nearly alone among developed countries in not requiring AM/FM radio to pay performance royalties to record labels and recording artists for playing their recordings. Broadcasters pay PROs for the musical composition right, but nothing for the recorded performance. The American Music Fairness Act — which would establish a terrestrial performance right — has been introduced in multiple Congresses without passing. Artists whose work was primarily marketed through radio historically received no royalties from their most-played medium.
Before the MMA, federal copyright law did not apply to sound recordings made before February 15, 1972 — governed instead by a patchwork of state law. This meant non-interactive streaming services owed no federal statutory royalties for pre-1972 recordings, resulting in significant underpayment for artists like Chuck Berry, Aretha Franklin, and early Beatles recordings. The MMA's CLASSICS Act provisions brought all sound recordings into the federal copyright system, requiring digital performance royalties for pre-1972 recordings at the same rates as later recordings.
The royalty per stream is small — typically $0.003–$0.005 per stream for all parties combined. The split is approximately:
- Record label: 52–58% of sound recording royalty (often retaining most of it)
- Performing artist: 15–25% of sound recording royalty (depending on recording contract)
- Songwriter(s): ~15% of total revenue in mechanical royalties via MLC
- Publisher(s): portion of songwriter's mechanical share, plus publishing administration fees
- PRO (ASCAP/BMI/SESAC): performance royalty share distributed to songwriters/publishers
An independent artist who has self-released, owns their master recording, and retains full songwriting credit captures a far larger share per stream than a signed artist — but typically with far lower volume.
How It Affects You
<!-- pria:personalize type="generic" -->If you're a songwriter or music publisher: Ensure your works are registered with both a PRO (ASCAP, BMI, or SESAC — you can only join one; comparison: ASCAP and BMI are roughly equivalent in reach and are non-profit, SESAC is invitation-only) and with the MLC (mlc.com) to receive mechanical royalties from streaming. Registration with the U.S. Copyright Office is separate and protects your right to sue for statutory damages — register within 3 months of publication to preserve full statutory damages ($750–$150,000 per work for willful infringement). Check the MLC's public database to confirm your works are correctly claimed — unmatched royalties are held for 3 years and then distributed to other rightsholders even if you later come forward.
If you're a recording artist or independent label: Your sound recording earns digital performance royalties through SoundExchange — register at soundexchange.com to claim your royalties. SoundExchange holds unclaimed royalties; if you've had any recording played on internet radio, satellite radio, or Pandora, you likely have unclaimed funds. For interactive streaming (Spotify, Apple Music), negotiate your distribution arrangement carefully — distributors (DistroKid, TuneCore, CD Baby, etc.) pass through a percentage of the streaming royalty to you, but the underlying rate is set by the label's deal with the platform, not by statute. For truly independent artists without a label, streaming platforms' direct distribution rates apply.
If you run a business that plays music (restaurant, retail store, fitness studio, hotel): You need public performance licenses. Contact ASCAP (ascap.com/licensing), BMI (bmi.com/licensing), and SESAC (sesac.com) — or use a blanket licensing service like Soundtrack Your Brand or Mood Media that bundles PRO licenses. Playing music from a personal Spotify account in a commercial setting violates your Spotify terms of service and requires separate public performance licenses. Fines for unlicensed public performance are significant — PROs actively conduct audits of commercial establishments.
If you're a music educator or school music program: Performance of musical works in face-to-face classroom instruction is generally exempt under 17 U.S.C. § 110(1). School concerts and recitals for non-commercial educational purposes may be exempt under § 110(4) if no admission is charged or proceeds go entirely to the school. Online instruction (distance education) requires compliance with the TEACH Act (§ 110(2)) — works must be integral to the course, access must be limited to enrolled students, and the institution must have copyright policies in place. Public performance licenses are required for school dances and events where admission is charged.
If you're a music streaming startup or app developer: You need licenses from both the MLC (for mechanical rights to musical compositions — apply for a blanket license at mlc.com, pay monthly usage fees, and report detailed usage data) and separately negotiate sound recording licenses with the major labels (Universal, Sony, Warner) and aggregators covering independent labels. The MLC blanket license covers only mechanical rights — you still need public performance licenses from ASCAP, BMI, SESAC, and GMR for the public performance right in musical compositions. Interactive streaming requires all four; non-interactive streaming uses CRB statutory rates for sound recordings via SoundExchange and PRO blanket licenses for compositions.
<!-- /pria:personalize -->State Variations
<!-- pria:personalize type="state-specific" -->Music licensing is almost entirely federal law. Key state variations:
- Pre-1972 recordings state law: Although the MMA brought pre-1972 recordings into federal law for digital performance royalties, some state courts have still applied state common law to other uses — check with IP counsel for uses beyond digital streaming
- State tax on royalty income: Music royalty income is generally taxable as ordinary income federally; state treatment varies. Some states (Tennessee, which has a large music industry) have historically offered favorable tax treatment for music royalties
- Right of publicity: State laws govern whether an artist's name, voice, or likeness can be used in advertising — this intersects with but is separate from copyright in recordings
- Nashville / Los Angeles / New York local resources: The Nashville Songwriters Association International (NSAI), California Copyright Conference, and New York AIMP chapter provide local resources and publisher connections for music creators in those markets
Implementing Regulations
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37 CFR Part 210 — Compulsory Licenses for Making and Distributing Physical and Digital Phonorecords of Nondramatic Musical Works: the Copyright Office's implementing rules for the Section 115 mechanical license, restructured by the Music Modernization Act to cover both the traditional non-blanket license (physical CDs, individual downloads) and the new streaming blanket license. Key provisions:
- Subpart A — Non-blanket compulsory license (§§ 210.1–210.11): the traditional Section 115 compulsory license for physical copies (CDs, vinyl) and permanent digital downloads; a record company (or artist) that wants to cover an existing song must provide a Notice of Intention (NOI) to the publisher before or within 30 days of distributing the phonorecord; the NOI triggers the compulsory license without negotiation; monthly statements of account and payments at the statutory rate must accompany royalty payments; § 210.10 governs transition-period royalty statements for digital music providers who owed royalties for pre-MLC streaming before the blanket license became available (January 2021)
- Subpart B — Blanket compulsory license for digital streaming (§§ 210.21–210.31): implements 17 U.S.C. § 115(d), the MMA's blanket license operative since January 1, 2021; key mechanics:
- § 210.23 — Designation of the MLC and Digital Licensee Coordinator: the Copyright Office officially designates the Mechanical Licensing Collective (MLC) as the collective that administers the blanket license and collects and distributes royalties; the MLC is designated for 5-year terms; it was originally designated in 2019 and redesignated in 2024
- § 210.24 — Notices of blanket license: a streaming service (digital music provider) must submit a notice of blanket license to the MLC before or at the time it begins operating under the blanket; the notice contains the service's contact information, a description of the service, and a certification of accuracy; without filing the notice, the streaming service does not have the benefit of the blanket license and is liable for infringement for unmatched songs
- § 210.25 — Notices of nonblanket activity: a "significant nonblanket licensee" — a streaming service that obtains individual licenses for some compositions rather than using the blanket — must report to the MLC which works it holds individual licenses for; this disclosure prevents double-counting and ensures the MLC doesn't attempt to collect for works already licensed directly by the service
- § 210.26 — Data collection and delivery efforts: streaming services and publishers must cooperate on matching sound recordings to their underlying musical compositions in the MLC database; both sides bear obligations to provide data (services report detailed play data; publishers/songwriters provide complete ownership and metadata); the matching effort is critical because unmatched royalties are held for 3 years and then distributed to known rightsholders based on market share — even when a rightsholder hasn't been identified
The Section 115 blanket license was the Music Modernization Act's transformative change for digital music licensing. Before 2021, streaming services like Spotify and Apple Music had to individually license each of the millions of songs in their libraries — a practically impossible task that led to massive royalty underpayment and thousands of copyright lawsuits (notably, Spotify settled class actions totaling $112 million in 2018 before the MLC launched). The blanket license gives streaming services a single mechanism to license all songs; the MLC handles collection and distribution. The database matching problem (§ 210.26) remains the central challenge — the MLC estimates that hundreds of millions of dollars in annual royalties cannot be matched to specific rights holders, creating a pool of "unmatched" funds that is distributed by market-share formula after 3 years rather than reaching the actual songwriters.
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37 CFR Part 380 — Rates and terms for nonsubscription digital audio transmissions (internet radio, webcasting rates for sound recordings as set by CRB)
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37 CFR Part 382 — Rates and Terms for Transmissions of Sound Recordings by Preexisting Subscription Services and Preexisting Satellite Digital Audio Radio Services (SiriusXM, Music Choice, and similar "grandfathered" services): the CRB's rate-setting for the two categories of digital audio services that existed before the Digital Performance Right in Sound Recordings Act of 1995 created the general statutory license:
- "Preexisting subscription services" (PSS) — multi-channel music subscription services delivered via cable or satellite that were in operation on July 31, 1998 (when DPRSRA was enacted); the primary surviving PSS is Music Choice (delivered via cable television companies); PSS services pay a percentage of gross revenues for the right to transmit sound recordings without direct negotiation with each copyright holder
- "Preexisting SDARS" — satellite digital audio radio services in operation on July 31, 1998; the primary SDARS provider is SiriusXM; SiriusXM pays a percentage of gross revenues to SoundExchange for the right to transmit sound recordings; the SDARS rate is distinct from the "Webcasting" rates paid by internet radio services (covered in Part 380)
- § 382.10 — PSS royalty rates: commencing January 1, 2018, preexisting subscription services pay a royalty equal to 8.5% of gross revenues for use of sound recordings in their programming; gross revenues include all subscription fees, advertising revenues, and other revenues directly attributable to the music programming service; this is a percentage-of-revenue model rather than a per-play rate
- § 382.21 — SDARS royalty rates (SiriusXM): SiriusXM pays royalties set by the CRB in 5-year proceeding cycles; for the current rate period, SiriusXM pays approximately 15.5% of gross revenues per year to SoundExchange for use of sound recordings on its satellite radio service; the SDARS rate has been the subject of intense litigation between SiriusXM and the recording industry — the most recent CRB proceeding (Web VI, covering 2021–2025) was contested at multiple levels; SiriusXM petitioned the D.C. Circuit for review arguing the CRB's rate increase was improper; SoundExchange distributes SDARS royalties on the same split as other statutory services (50% to label, 45% to featured artist, 5% to session musician/vocalist fund)
- § 382.11 — Gross revenues calculation: "gross revenues" for PSS purposes includes subscription fees charged to subscribers for access to the music service, advertising revenues from the music channel, and revenues from direct partnerships related to the music programming; excludes revenues from non-music programming and certain pass-through revenues from cable operators; the definition of gross revenues has been contested in CRB proceedings because it determines the royalty base for a percentage-of-revenue model
The Part 382 SDARS rate is particularly significant because SiriusXM is one of the largest payers of sound recording performance royalties in the United States — paying hundreds of millions of dollars annually to SoundExchange. SiriusXM's SDARS rates are set separately from (and generally higher than) the internet webcasting rates in Part 380, reflecting SiriusXM's status as a preexisting service grandfathered into a more favorable statutory license framework before the growth of internet streaming. Recent CRB proceedings: CRB Web VI (Phonorecords VI) set rates for 2021–2025; the SiriusXM SDARS rate was set at 15.5% for 2023–2027 following extended proceedings; the rate history shows increases from 6% in 2008 to the current 15.5%.
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37 CFR Part 385 — Rates and terms for interactive streaming (on-demand streaming mechanical rates — Phonorecords IV rates covering 2023–2027; sets percentage of revenue formulas for major music streaming services)
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37 CFR Part 381 — Use of Certain Copyrighted Works in Connection with Noncommercial Educational Broadcasting: the CRB's rates and terms for PBS, NPR, and other public broadcasting entities to use musical compositions and visual works in their broadcasts — the public broadcasting sector's statutory license under 17 U.S.C. § 118:
- § 381.4 — PBS and NPR performance rates: the Public Broadcasting Service and National Public Radio pay flat annual licensing fees per type of use of nondramatic published musical compositions in their broadcasts; the rates are set for 5-year periods (current period: 2023–2027) and adjusted annually for CPI inflation (§ 381.10); PBS pays separate rates for performance of music in television programming than NPR pays for music in radio programming; the statutory license covers all broadcast performances and permitted copies made to facilitate those broadcasts — eliminating the need for PBS and NPR to negotiate individually with ASCAP, BMI, or SESAC
- § 381.5–381.6 — College and community radio performance rates: noncommercial educational radio stations licensed to colleges and universities pay separate (lower) rates for use of musical compositions than PBS/NPR; other public broadcasting entities not affiliated with colleges or PBS/NPR pay still different rates; the CRB differentiates by organizational type and audience scale
- § 381.7 — Recording rights (ephemeral copies): public broadcasting entities routinely make "ephemeral" recordings of programs — temporary copies made to facilitate broadcast — and "archival" recordings kept for educational purposes; this section establishes the royalty rates for making these recordings of nondramatic musical performances and displays; the recording rates are separate from the broadcast performance rates
- § 381.8 — Pictorial, graphic, and sculptural works: public broadcasting entities also pay royalties for using published visual works — photographs, illustrations, graphics — in their programming; this section covers art documentary programs, news graphics, and other uses of visual works in public broadcast content; the rates distinguish between uses in educational programming versus general broadcast
The Part 381 statutory license is a critical feature of the U.S. public media ecosystem: without it, PBS and NPR would face the same laborious and expensive per-work licensing negotiations as commercial broadcasters but with far smaller budgets. Section 118 of the Copyright Act recognizes the public interest in noncommercial educational broadcasting by creating a statutory license that allows public broadcasters to use music and visual works upon payment of set rates — without individual rights holder approval. The CRB sets these rates in 5-year proceedings, with rates for 2023–2027 established in the most recent determination. Recent rulemakings: 83 FR 2740 (January 2018) — previous 5-year rate period (2018–2022); 72 FR 67647 (November 2007) — earlier adjustment.
Pending Legislation
- American Music Fairness Act (AMFA) — Would create a terrestrial radio performance royalty for sound recordings, ending the AM/FM exemption. Radio broadcasters have successfully blocked this legislation for decades. Small stations (under $1.5M revenue) would pay a nominal flat fee. Status: Repeatedly introduced; has not passed.
- Living Wage for Musicians Act — Would establish a minimum per-stream royalty rate rather than the percentage-of-revenue approach, ensuring a floor payment to artists. Status: Introduced; did not advance in prior Congress.
- CLASSICS Act implementation oversight: Congressional scrutiny of MLC implementation continues, particularly regarding unclaimed royalty distribution and the transparency of the MLC's public database.
Recent Developments
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Phonorecords IV ruling (CRB, 2022–2023): The CRB's fourth determination of mechanical royalty rates for interactive streaming set songwriter rates on a rising scale: approximately 15.1% of total content costs by 2027. The ruling was appealed by the major labels (seeking lower rates) and songwriter groups (seeking higher rates); the D.C. Circuit affirmed in substantial part in 2024. The rate increase represents a meaningful improvement for songwriters over the Phonorecords III rates but still falls far short of the rates major labels receive for sound recording rights.
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MLC operations and unclaimed royalties: The Mechanical Licensing Collective has collected and distributed hundreds of millions of dollars in mechanical royalties since launching in January 2021. However, the MLC's public database of musical works — intended to match compositions to sound recordings and ensure royalties reach the right parties — has faced persistent criticism for incomplete matching, incorrect ownership data, and slow reconciliation of unmatched funds. Songwriters with improperly claimed works have reported significant royalty diversion to incorrect parties.
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BMI's for-profit conversion (2022): BMI's conversion from a non-profit membership organization to a for-profit company — and its simultaneous exit from the DOJ consent decree that had governed its licensing practices since 1941 — raised significant concerns among songwriters, music users, and antitrust regulators. BMI argued that the consent decree was designed for an era of analog broadcasting and that a for-profit structure would allow it to generate better returns for affiliated songwriters. The DOJ Antitrust Division is monitoring BMI's post-conversion licensing practices for potential antitrust issues.
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AI-generated music and copyright: The rapid proliferation of AI music generation tools (Suno, Udio, others) has triggered copyright litigation and legislative discussion. Lawsuits filed in 2023–2024 allege that training AI on copyrighted recordings without licenses constitutes infringement. The Copyright Office issued guidance in 2024 stating that AI-generated works without human creative authorship are not copyrightable, but that works incorporating substantial human creative choices may be protected. The question of whether AI companies must pay mechanical and performance royalties for training data consumption is unresolved.
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Streaming economy concentration: Three major record label groups (Universal Music Group, Sony Music Entertainment, Warner Music Group) control approximately 70% of recorded music market share and negotiate directly with streaming platforms. Independent artists and small labels argue that this concentration allows majors to extract disproportionate minimum guarantees and favorable per-stream rates at the expense of independent music. The DOJ and FTC have not challenged major label-streaming platform deals under antitrust law, but concentration concerns are a recurring topic in congressional hearings.
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AI music copyright litigation settles (2025): Major record labels (UMG, Sony, Warner) settled copyright infringement lawsuits against Suno and Udio — two leading AI music generation services — in late 2024/early 2025. The settlements, terms undisclosed, set precedents for licensing AI training on copyrighted music catalogs. The Recording Industry Association of America (RIAA) has pursued additional AI copyright enforcement; the settlements did not resolve the broader legal question of whether training AI on copyrighted works requires licenses, but as a practical matter established that major labels will seek compensation. AI-generated music distributed commercially must now navigate both the training-data licensing question and performance royalty obligations if the generated music contains samples of existing works.
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ASCAP consent decree review under Trump DOJ: The DOJ Antitrust Division's ASCAP consent decree — which has governed public performance licensing since 1941 and which ASCAP has sought to exit (following BMI's 2022 exit) — remains active but under review. The Trump DOJ Antitrust Division, under Gail Slater, has taken a more aggressive antitrust posture in some technology markets while relaxing others; ASCAP's pending consent decree exit negotiations are ongoing. Music users (bars, restaurants, streaming services) prefer ASCAP to remain under consent decree oversight to prevent it from gaining BMI-style unconstrained market power.