SESAC set to expand it’s PRO portfolio

So first let me pat myself on the back . . . see UMG/Performance Royalties . My assumption regarding performance is seeming to be true, if SESAC is expanding beyond performance royalties days after a DOJ hearing on music licensing I can only infer that labels are coming for a bigger chunk or are planning to cut out PRO’s completely. Billboard reports that SESAC is looking to broaden it’s music licensing portfolio and business model. Recently the organization added venture capitalist leaders Kelli Turner and John Josephson to expand SESAC’s business model into mechanical licensing, neighboring rights, and synchronization. Billboard reports SESAC sent a letter of interest to the Harry Fox Agency offering $35M for purchase, such an acquisition would expand SESAC into mechanical licensing. Even with the purchase of the Harry Fox Agency SESAC’s expansion would not come easily.

SESAC unlike BMI and ASCAP operates outside of the DOJ required consent decrees. These US DOJ consent decrees determine the requirements of BMI and ASCAP licenses. The court recently denied labels the opportunity to partially withdraw from BMI and ASCAP licenses in order to handle digital licensing themselves. As a result Sony/ATV and UPMG are threatening to withdraw completely from BMI/ASCAP if the current consent decrees are not amended to allow for partial withdrawals. The consent decrees allow BMI/ASCAP to operate in an anti-trust fashion offering blanket licenses to clients and requiring labels to sign up for all or nothing publishing agreements. SESAC’s London based office gives it an international advantage over BMI and ASCAP but it is currently facing two anti-trust lawsuits from the Radio Music Licensing Committee and the Television Music Licensing Committee. The current lawsuits challenge SESAC’s ability to offer only blanket licenses to the largely independent television and radio stations in SESAC’s portfolio.

The next few months will prove pivotal to all three PROs, SESAC’s lawsuits and the consent decrees will determine what PRO’s offer and how they operate. We could see an expansion in the marketplace with Sony/ATV and UMPG handling it’s own digital licensing and BMI/ASCAP expanding into mechanical licenses while SESAC may be forced to create genre based licensing packages.

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