Universal Music Publishing has confirmed its intention to withdraw its digital rights controlled catalogues from US performance rights organisations ASCAP and BMI.
UMPG chairman and CEO Zach Horowitz confirmed the planned move in a statement to Billboard citing an inability from both societies to achieve market rates with digital services.
The decision relating to ASCAP will be effective on July 1 this year, while an effective date is being worked out for the exit from BMI.
“With the consent decree constraints that apply to both ASCAP and BMI, in our view, it’s especially challenging for either society to achieve market rates in negotiations with digital services," said Horowitz.
"In order to ensure that our songwriters are fairly compensated, we believe the best approach is for us to negotiate directly with these services. For that reason we notified both ASCAP and BMI at the end of last year that we will be withdrawing our digital rights for controlled catalogues at the earliest opportunity. With ASCAP, this will be effective July 1, 2013. With BMI we are still working out the effective date."
Billboard sources also report that BMG Chrysalis has also negotiated the option to do the same but is yet to decide if it will use a direct strategy.
Sony/ATV/EMI stepped away from ASCAP and BMI from January 1 this year and managed to negotiate a 25% hike in royalty rates from Pandora directly less than a month later.