Silver bullet i created a competition in the marketplace and made the Consent Decrees unnecessary. But that is not the world were living in right now. So especially given that weve seen increasing consolidation among the publishers some of which was justified because we have the Consent Decrees as a backstop and we have this federal court case where a judge found that the publishers have the opportunity to compete and to coordinate with each other that sunset in the Consent Decrees at this time would be unnecessary but we should of course always the reevaluating as we go forward. Thank you all. Thank you, mr. Chairman. I think i would like to start with mr. Dowdle in this round. Mr. Dowdle i think as has been mentioned today a distinction characteristic of any free market system is that two parties negotiating have the ability to walk away from the negotiation if they cant achieve a mutually agreeable outcome. And yet its been suggested that Music Services and broadcasters in particular cannot, they literally cannot walk away from license negotiations with the publisher or the pr of because they dont have total control over what music p. R. O. What music they public to perform. Can a broadcaster removed a specific licensures catalog from its service . Is that possible . Theoretically possible, not practically possible, and heres why. We have very starts the program that we put out over our airwaves. Some of that we produce. Without the we produce, we identify the music we are able to do that exactly. But for a very large speed then you can figure who holds a copyright and whether or not exactly. If we cant come to an agreement we can cut the music out. The music, the program would produce such as our local news local magazine shows, things like that. For a large portion of our programming we dont have the ability to do that. Part of the programming just Network Programming is cleared to do the do. So we have to worry about that. The networks worried about that but all of our syndicated programming, all of our commercials and a lot of the stuff that comes in between, we dont have that editorial control. We couldnt do if we tried. Therefore, we are at the mercy literally of these bureaus to everybody thats going to come to us and say, you dont licensure me, im coming after you. We have no way to avoid. Would any of that change if the broadcasters were provided with the contents updated list of songs in the catalog at issue . Would that change . It would change in the sense that the producers of syndicated programming or the commercials they dont identify for us whose music they are using. I dont know that it is within the realm of possibility to every single producer thats going to provide music to us and our programming identify music. If you could do that, it is theoretical possible. It is titled not going to happen. You basically have had to go to see the future. If you had a that superpower than a lot of other things would be better, too. If we were king it would be a different place. Ms. Griffin i believe much of the pressure on the Department Justice to make changes to the Consent Decrees may well stem from the threat of the withdrawal from the publishers which would services threaten the current blanket license scheme that we have in place today. If it is truly at risk of falling apart what, in your view is the best alternative to the Consent Decree system when it comes to ensuring robust competition in the marketplace for performing rights licenses . In terms of alternative structures other than antitrust Consent Decree we give statutory licenses for certain copyright law. If we can come up with a statutory license that also protects competition and provides transparency, helps us get paid directly, we would support that. But at the time we dont have that for these kinds of uses. So i be concerned about dismantling the protections in these Consent Decrees and the revenue structure set up. Do you think it makes sense to have, you know, quasirepertory system essentially a regulatory system, administered by a handful of doj regulators and a couple of judges . You know should congress consider legislation setting up some other type of regulatory structure, and if so what with that legislation look like . So we do have other structures come as i think was mentioned earlier we have the copyright royalty board for statutory licenses. But in terms of the Consent Decrees as they are now i would say that the department of justice has very deep antitrust expertise and expertise evaluating how markets are working, which is very important here. And for the federal judges do what they are impartial they understand the law and they through the discovery process are able to obtain all the facts. I was was i dont do that as a bad system but its not that we cant consider new ones. Thank you. My time has expired. Senator klobuchar. Thank you. Ms. Griffin, one of the things we know is that regardless of the Consent Decree review youre talking about some other things with senator lee not a possibility if we didnt have the Consent Decree i think he said that there would be a problem, from a consumer standpoint. But how about private enforcement of the antitrust law . Even if doj isnt pursuing private parties can address the issue from the corporate d. C. Downside on relying on private enforcement . Yes, sir needed to my private enforcement would be that the parties bring the cases could likely be much smaller or at least it would make it relatively easy for a very large company, like it and or or a large broadcaster to bring a suit, although that itself the little guy, it would be near impossible for the because of the expense. And also i would say that transparency plays an issue because part of the problem is its difficult to bring an antitrust lawsuit against him some of if you dont know that they are coordinating. Very good. Mr. Dowdle, do you want to weigh in on that at all . Frankly i dont know if theres a construct that we can come up with. Certainly its problematic for a small broadcaster like us we are not very big frankly. For us to be left with a private antitrust enforcement against an entity such as ascap and bmi is not very appealing. Talk about expense and thats not an expense spread over an industry. Thats our expense i just dont think that we could do it not even talk about the little broadcasters that are much smaller that we are. Its not given a practical possibility for them. I just dont think that is a workable solution. I just wonder. I wanted to get your views because thats been thrown out. Of course. Thank you, senator. Do you see any changes you think would work with the concerns that have been raised here . I mentioned transfers but i think that is a huge comp is been mentioned by everyone editing agreed upon by everyone. Transparency in the process has been historically a real problem. I know that because i used to license all of the music used in intel commercials before game two bonneville. Finding the songwriter and finding director let that controls the rights was a real problem. Without better every ability i just dont think its workable. Okay. Thank you. Mr. Pincus, to you want to weigh in on this . A couple things. First transparency. I greet like all of the other panelists that thats a very important issue but i think the market is solving that issue. There is more data if it were on Music Publishing copyrights now than there ever has been and is Getting Better on almost a daily basis. Not only at the independent level but also at other levels. And just quickly to another point about the blanket licensing system. Many of the arguments that are being put forth our a very good reason to preserve the blanket licensing system. I agree with mr. Dowdle that the Television Licensing system should operate on a blanket basis. The problem is that its attached by the court to the digital licensing problem. Additional licensing is much easier done on a direct basis than for example, Television Licensing. Thats a good argument for why partial withdrawal of Digital Rights ought to be allowed to occur. Well, thats one of the million technical questions that probably is beyond my pay grade. I will say as far as things such as transparency that i think would be relevant to may be part of your question. If i had the hit song 1 million plays on terrestrial radio is kind of a threshold. They send us a plaque at 1 million plays, okay . If i have one of those every now and then, im raising a family and we are doing okay. Now were in a situation where receive these numbers, 50 million 100 million spins and its own . Just shaking our heads going, what are you talking about . Like we cant even comprehend you know, and understand its a different medium and we can talk about the internet, we can talk about technology but 1 million plays, we are smiling and taking the kids to movies. 100 million plays is worth a few thousand dollars. Now, we get transparency on that, we see those numbers. Quite clear. So i think thats what we cant emphasize enough. How is that fair and where is the middle ground . I mean, under those numbers, if you move that ledger around just a little bit, doing what i do is a very profitable business potentially. But apparently music is more popular than its ever been and i think everyone will tell you that. Senator klobuchar, i think its important as mr. Miller talks about 1 million spins on terrestrial radio versus the internet and noted its a Different Technology internet delivered as a onetoone delivery mechanism. Its not a one to many like broadcast. So if you wanted to do a real apples to apples comparison, if you were to take 1 million spins on pandora to reach a Million People on for example, lee 100 the largest registration in the city, you would only have to play that song 16 times but if you want to reach that same million person audience in los angeles, you dont need to play that song 21 times but its important we contextualize what 1 million spins on pandora means relative to spins on a terrestrial radio broadcast. Thank you. Senator blumenthal. Thank you, senator lee. I have a question for mr. Dowdle. In your testimony he talked about i think both the value of the Consent Decree get a and about the harm that would because if composure than publishers could withdraw from some of the rights without withdrawing all of their rights. You didnt address i dont believe the two changes that ascap and bmi have proposed to the content decrease bundling of additional rights, and arbitration. Could you give us your view of those proposals because yes senator blumenthal. Thank you. I gave the figure out of the room, i didnt address arbitration. Arbitration is a poor is even a second choice, a very poor second choice to the system that we have now for these reasons. With an arbitrator you dont know who youre going to end up with whether even to know anything about the industry. And what you do know with the rate court that we have is that these courts have deep experience and a lot of history with these Consent Decrees. They understand the underlying dynamic that is going on. Thats first. Second, in the federal courts, they have a lot of tools available. Mr. Harrison talk about this. In discovering information getting the information front of the tribunal, having both sides able to engage in the process freely and openly so that the full panoply of information is in front of the tribunal. As an arbitrator you dont necessarily have that. And i think substituting arbitration for we have now is not really a very good solution, in my opinion. As to other licenses from my standpoint, i mean, i mentioned earlier im a member of ascap, have been for over 20 years owned music companies. And i think theres really something to look out there in allowing these p. R. O. S to administer additional rights. Their competitors are certainly doing that. Sesac is able to. Global rights is able to. Ascap and bmi are going to compete Going Forward we should take a look at that. Because they will not have access to millions of copyrights through a blanket license agreement. Consumers lose because once the money stops flowing but we are mostly concerned about songwriters because they are simply not going to be capable of licensing 700,000 establishments in the United States and millions of establishments outside of the United States which means they will not get paid and their work will be infringed. Why do you think i think i know the answer but why would eliminating the consent be preferable in a Perfect World . Because i believe the free market works. Without regulation we think you get the right results. And as copyright owners, we believe this principle that you should control your assets whether it is a Real Property asset or intellectual property asset you should have control of that owner the content takes that away. Thank you. You made an interesting point about the onetoone relationship of streamers versus broadcast. In your opinion today mr. Millers concern about being justly compensated in your opinion today when you normalize in that way do you feel like they are just compensated . Pandora is the highest form of radio that we pay them to satellite radio. I think the best performing song by mr. Miller on pandora is country girl which i believe was recorded by tim mcgraw. Last year 2014 pandora would have paid around 7000 to mr. Miller, his co writers and the six publishers listed on that song. Candidly they would pay close to 90,002 mr. Mcgraw and his record label. I understand the disparity is a motivating factor for mr. Miller and ms. Matthews to seek to modify the dissent decrees but at the end of the day if pandora is paying 50 of its revenue to the record labels and the solution is to pay 50 of the revenue to the publishers i cant make that up on volume. If theres going to be come if the disparity is going to be sold to custody solved by the copywriters themselves. Mr. Harrison was talking about this database to increase transparency. In your opinion is that a good idea or a bad idea and what are your concerns or the merits and please run down the line. As i stated earlier, they fully support transparency. We most recently made modifications to our own proprietary system that is available what you have a concern with the concept to mr. Harrison has proposed or do you feel like you are already achieving it i am trying to get a sense for this idea. My specific concern would be practically how one would require cooperation through the entire sector especially with unregulated actors and competitors. I know that they are willing to cooperate but i worry that the licensees will never have access to the full picture of the data that is required. Do you have anything you would like to add in terms of your rationale . We know the database exists and that the publishers. It is ingested into the system so that we can understand what songs are controlled by the transparency piece has to go far enough to allow us to understand not just the owner of the song but also the sound recordings that have been made. In terms of the open a and agreed at agree that the market is taking care of that problem. The comments not being able to pay 50 in each party that i would also say that im not sure that i feel is a smallbusiness owner is my responsibility to subsidize. I think it is problematic to get everybody involved. But to control 90 , lets start there. And if you can get the other actors in, thats okay. But lets start with 90 and see where it goes. They can speak to that much better than me on the technicalities. I will clarify the comment is called southern girl, not country girl. That would be 7000 split six ways i have a six to 7,000 but theres that is a number one song in the United States. Its how to out to get as much information as possible. There are a lot of details and other factors have been talking about including the copyright office. If you look at the licensors you might be able to download a list of the songs in the catalog. At some point to this of this was our catalog that we will not promise you that is in it on the day you license which brings up liability concerns for somebody to that tried to enter the market. We are approximating the data as practical. One of the majors has all of the information. Thank you for testifying. I dont have any additional questions. Thank you. We have two different types of royalties paid in some circumstances. One established under the dissent decrees and another established under the copyright royalty board. Of those established under the latter are substantially higher than those that were established under the former. We have a set of royalties they go to those that wrote the song and another set to that go to those that recorded the song. Why should there be a substantial difference between the two rates . I dont believe pandora is in the best value to position to value the recording. I think that its probably better left to publishers and songwriters and artists and labels. Having said that if you go back to the copyright royalty board proceedings what you have is executives of companies that own the record labels and publishers that should be paid to perform a sound recording should be higher than the rate that was paid to the record labels invest significantly more than bringing the music to market. As i said i am not in a good position to make those relative value judgments. At the end of the day the copyright owners themselves have made those arguments. If the department decides to allow the partial withdrawal it will likely impose other requirements including increased transparency changes to Board Membership into some of these things that have been mentioned earlier in the hearing. In your opinion will additional safeguards be sufficient to ensure a competitive market and publishers can partially withdraw flex without seeing the details of all love not just the suggestions but actually the language thats intended to be used, its hard to judge prospectively but i remain confident the department isnt going to do things that result in less competition in the market. I certainly hope but do you think those things would be sufficient . Without seeing a fu