BMI And ASCAP Reject Licensing Legislation.

NEW YORK--(BUSINESS WIRE)--Oct. 8, 1998--In response to last evening's passage by the United States Congress of a long debated bill addressing critical issues affecting the music community, both BMI and ASCAP expressed deep disappointment and outrage.

"In one sweeping legislative action," said Marilyn Bergman, President and Chairman of the Board of ASCAP, "the House and Senate have passed music copyright term extension with one hand yet severely curtailed music copyright protection with the other. With this music licensing legislation, which seizes the private property of copyright owners, the United States Government has severely penalized America's songwriters, composers and publishers. Not only will our earnings be reduced, but so will the creative incentive for future generations of songwriters. It is important to let music creators everywhere know that we did everything humanly possible to combat this unconscionable legislation."

"This is a sad day for all creators of music in America, and intellectual property rights owners," said Frances Preston, President and CEO of BMI. "This legislation challenges the spirit of the Constitution as it expropriates, without compensation, the intellectual property of our songwriters, composers, and music publishers. Legislation which was first introduced under the guise of protecting mom and pop establishments now is revealed as a scheme to protect the largest restaurants in the nation while damaging tens of thousands of genuine small business people, America's songwriters and composers. It also puts us in violation of the international treaties governing intellectual property, including the Berne Convention and the TRIPS Agreement."

Both performing rights organizations consider Congress's action to be inherently unfair. The average songwriter earns approximately $4,700 from performance royalties; while the average restaurant owner earns about $44,000, according to National Restaurant Association figures. Even before this anti-music legislation was passed, music licensing costs constituted far less than 1% of the average restaurant's gross sales. The earnings of songwriters, composers and publishers have now been reduced by tens of millions of dollars annually.

The bill that passed yesterday consists of two parts: the much-needed Sonny Bono Copyright Term Extension Act, and the "Fairness in Music Licensing Act". The misleadingly named "Fairness in Music Licensing" provision allows more than 70% of bars and restaurants to use radio or TV music for free, according to the Congressional Research Service. "Copyright Term Extension" extends the length of copyright in the United States by another 20 years, from the current standard of the creator's "Life Plus 50" years to "Life Plus 70" years. It was designed to bring domestic copyrights into line with those of United States trading partners in the European Community. The United States is the leading producer of intellectual property in the world.

Bergman and Preston, in a joint statement, said: "While copyright term extension brings United States law in line with most of the world, we're concerned there will be international repercussions resulting from this new music licensing legislation. Simply put, we will be collecting substantially reduced royalties from the majority of restaurants, bars, grills and many retailers in the United States for the songwriters of the world." They concluded: "ASCAP and BMI are committed to working together with music creators everywhere to reverse the effects of this unfair and damaging music licensing exemption."

ASCAP (The American Society of Composers, Authors and Publishers) and BMI are America's two largest music performing rights organizations. The two groups represent songwriters, composers and music publishers of virtually all of the copyrighted music in the United States, covering every musical genre and style. Each organization offers music licenses to establishments and other music users which allow them to perform publicly any or all of the works in their respective repertories. Through affiliation agreements with performing rights organizations throughout the world, BMI and ASCAP also offer access to millions of international copyrighted musical works.