i'm a very important member of ascap i am a member of ascap and still a publishing interest as well inmusical works. these are friends of mine so not trying to say anything personal about their personal behavior, but they don't really compete is to protect the wood because they don't allow people to license with those societies to us to the works in the catalogs the deal exclusively. i don't think that is competition, frankly. spin ms. griffin, cottages as to what risks do we run if doj were to disband the consent decree also? if we really got to a free market of light on antitrust statutes, and that is partial withdrawal medicaid or aggregate those risks? >> so if we were to disband the consent decrees entirely i think the three major publishers would have the market power to demand whatever they want for licenses. they may or may not be able to efficiently licensed the nondigital pieces of the market like restaurants and bars and cafÉs, and that could be a big mess as well but just looking at the digital side, i think the issue is that i come from the recording side of the business a

in 1941 ascap entered into a consent decree with the department of justice because ascap did not have significant competition. fast forward 74 years and today competition with ascap is alive and well. we compete directly with bmi and unregulated competitors, new licensing companies, foreign p.r.o.s, and even with our own music publisher members whom are always free to directly license their works. the barriers for entry are quite low and yet we are still governed by a world war ii era consent decree. which was last updated before the invention of the ipod. there have been seismic changes in the music landscape. people no longer buy the music they love, they stream it. streaming services offer more choice, and more consumer control. as a result they require access to a massive variety of songs in order to provide users with an optimally tailored content experience. this means the use of music has increased exponentially, but the payments have not followed. for a songwriter this is a terrifying trend. new and innovative market players require experimentation and novel approaches to musi

in 1941 ascap entered into a consent decree with the department of justice because ascap did not have significant competition. fast forward 70 years and today competition with ascap is alive and well. we compete directly with bmi and unregulated competitors, new licensing companies, foreign pros and our own publishing members. the barriers for entry are quite low and yet we are still governed by a world war ii era consent decree. there have been seismic changes in the music landscape. people no longer buy the music they love, they stream it. it offers more choice and control. it requires access to a massive variety of song from provide users to a content experience. this means the use of music has increased but the payments have not followed. for a songwriter this is a terrifying trend. new and innovative market players reskbirmtation and novel approaches to music licensing yet the consent decree restricts our ability to adapt because it's still stuck in 1941. some digital music services are unwilling to pay songwriters a fair market rate making it impossible for them to earn a sustai

>> because ascap believes the free market works. without regulation, we think you get to the right result. and as copyright owner, we believe at the core of our laws this principle that you should control your assets. whether it's a real property asset or an intellectual property asset, you should have control as that owner. the consent decrees take that control away. >> thank you. >> thank you. mr. harrison, you made an interesting point about the one to one relationship of streamers versus broadcast. in your opinion today, i think that mr. miller's concern about being justly compensated. in your opinion today when your normalize in that way, do you feel like the streamers are justly compensating? >> pandora's the highest paying form of radio there is. we pay more in total royalties than terrestrial radio or satellite radio. i think the best performing song by mr. miller on pandora is country girl which was recorded by tim mcgraw. last year, 2014 pandora would have paid around $7,000 to mr. miller, his three, his two cowriters and

>> since 2001 ascap has spent $86 million on court litigation. in the pandora litigation alone we discovered more than 75,000 documents. we deposed more than 35 individuals. these rates were proceeding sometimes last for years and sometimes require an appeal process to the second circuit. we think any other form of alternative resolution. every dollar spent to good outside counsel are dollars coming out of the pockets of the songwriters. >> let me go to mr. harrison again. compared to the 48% of revenue you pay for performances of musical works is paying 1.7% to songwriters the amount you proposed to the rate court judge is that an equitable rate for songwriter's? >> 1.7% that pandora proposed in the ascap rate proceedings is the rate that terrestrial radio pays to songwriters who publicly perform their works and we compete most closely with terrestrial radio fertile listeners in ad dollars soap we are going to have a distribution neutral or structure the 1.7% of revenue would be appropriate. >> mr. chairman could i ask just one more question? i

i'm a very important member of ascap. i still have publishing skbress, as well, in the musical works. these are friends of mine. so i'm not trying to say anything about their personal blaif i don't recall. but they don't really compete as to a particular work because they don't allow people to license with both societies. as to the works in their catalog, they deal exclusively. i don't think that that is competition, frankly. >> what risks do we run if doj were to disband? if we got to a free market and relied on any trust statutes. and how does partial withdrawal mitigate or ag ra gait those risks? >> i think the three major publishers would have the power to demand whatever they want for the licenses. just looking at the dichblgal side, we see that there in the major labels when they license uses not governed by statutory licenses. we've seen them demand equity stakes. they can get vertically integrated. we've seen them get large, lump- lump-sum advances. it doesn't go down to the artist at the end of the day. and then

to read because ascap believes the free market works without regulation you get the right result. with copyright owners we believe at the core of the laws is a principle you should control your assets whether real property or intellectual -- she should have control as an owner but they take that control away house committee and made an interesting point about the one-to-one relationship and in your opinion today with mr. miller's concern you feel like they are justly compensating? >> but with those royalties the best performing a song on pandora is country girl last year 2014 pandora would have paid around $7,000 to the code writers in the publisher's listed candidly they would have paid close to 90,000 to mr. mcgraw and his record label i do understand it is a motivating factor for them to seek to modify the agreement that at the end of the david is paying 50% of revenue to the record label and the solution is to pay the rest of the publishers i cannot make that up if the disparity would be solved and ask to re-read the copyright owners themselves not on the backs of the services

>> since 2001 ascap has spent $86 million on litigation. with pandora alone we discovered more than 75,000 documents in the post more than and 35 individuals. the proceedings sometimes last year's is and has required an appeal process for the second circuit. we think any other form of alternative dispute resolution is better for every dollar we spend that goes to lawyers are dollars coming of the pockets of the songwriters. >> compared to the 48% paying for performances for what use it to the record judge. >> so with any ascap rate proceedings to the songwriters to publicly perform their works. we compete most closely for listeners and add dollars if we have the distribution of 1.7% of revenue for recovery. >> just one more question? i apologize to my fellow senators. but i have to get back to the income tax matter. some songwriter groups have expressed concern of the lack of transparency with direct licensing deals. the terms are often subject to nondisclosure agreements. so songwriter's don't even know the details under which they are to

we keep talking ascap and bmi, the holders to the rights of most of the music written in the last 100 years. they're wanting higher and higher royalties for every stream and every play. what is happening there right now with bmi and ascap, and does that differ from the demands of the labels that own the music but not the songwriting? david: in general, our service from the beginning has been set up to pay rights holders for their music. we created this model of all you can consume and then paying back on the back end. we pay a lot of money. we continue to believe that it's important to do that. we just want to have equal rights to the rest of the industry and if we can do that we will compete is a great product and innovation for acquiring customers. cory: what is the first song you will sure on this service once you have launched? david: we did launch, and i have been holding back, trying to decide. i believe it's going to be "10" by pearl jam. cory: a fine seattle choice. thank you very much, we appreciate it. ♪ cory: i'm cory johnson. this is "bloomberg west." general motors making

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 one-to-one relationship of streamers versus broadcast. in your opinion toda

cory: what's happening right now with bmi ascap and how does that differ from the demands of the labels would say in general that our service from the beginning has been set up to pay rights holders for their music. we created this model of all you can consume and then pay on the backend. we pay a lot of money. we continue to believe that it's important to do that. we just want to have equal rates to the rest of the entity. we will compete with a great product and innovation for customers. cory: that was david hose of rhapsody. we'll be right back with more of best of "bloomberg west"." ♪ cory: i am cory johnson and this is the best of "bloomberg west"." these artist cannot put their work on video and youtube. what about money? they are trying to take it further. they have artists and fans with money in between. i learned about it from the ceo. guest: this idea is there is a new emerging creative class. it is hundreds of thousands of people that realize they can be creative entrepreneurs. cory: they don't have a label and a $50,000 advance. guest: it's the opposite. it used to be that t