Moving the (Over-Regulated) Music Industry into Modern Times
Music – whether it is pop, rock, country, rap, hip-hop, or any other genre – forms a large part of the human experience. Music is nearly always present in movies, public places, and often our personal vehicles; we can access music through a variety of services and on numerous types of devices. Despite its nearly universal presence in our lives, most of us rarely think about the music industry. If we ever did, we would undoubtedly be surprised to learn that the music industry is one of the most heavily regulated industries there is. Even more astonishing is the fact that these regulations were put into place in 1941 – when the world was an incredibly different place.
A recent paper from the Regulatory Transparency Project digs into the “dense arcane laws and regulatory procedures that rival the tax code in complexity” that govern this industry. As the paper’s authors note, not only is the level of governmental regulatory control unusual, but it is stifling an industry that most people do not even think of as needing regulation. The paper explains in detail how, through a series of historical accidents, momentum, and politics, we ended up with a handful of unelected judges, with no particular expertise in this area, determining how songwriters and composers get paid. Not only is this problematic for the songwriters and composers, but it has also constrained innovation in this field.
In spite of these outdated regulations, the music business has changed dramatically since the 1940s, especially over the last ten to twenty years. These changes – such as commercial FM radio, the Internet, and now the advent of digital streaming services such as Spotify and Pandora – have clarified just how out of date the regulations are. Imagine how innovative and dynamic the music industry could have been if it was not hampered by these regulations.
While some efforts have been made to bring the music industry into modern times, such as the passage of the Music Modernization Act, there is still work to be done. Makan Delrahim, head of the DOJ’s Antitrust Division, has signaled an interest in moving away from the outdated regulations and relying instead on market-based solutions in the music industry. Read this paper to understand why Delrahim’s efforts in this area should be supported to “free a well-loved and dynamic industry to meet the challenges and opportunities of the digital marketplace.”
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