The history of music licensing is a messy one, but the short version is that every time some new technology or technological shift has come along in the past century, someone in the industry has freaked out that it was going to mean the end of the world for them, and demanded that “something” must be done. What was often done was to add another layer of licensing, sometimes compulsory, sometimes blanket licenses, sometimes something else. Basically, every time the market shifted, copyright law was effectively patched with changes more or less duct taped on to existing law. Over time, this has just gotten messier and messier — especially as some of these rights “overlapped.” Is an internet stream of a music file a performance or a broadcast? If someone bought the file, do they still need to pay for a performance right? And that’s just a few of the very initial questions.
One company that has launched a music service recently passed around a graphic illustration of the insanity involved in licensing music for any sort of online music service:
What you see there is basically the result of a century or so of “bolting on” new licenses due to changes in the market, rather than any concerted effort to look at whether or not the underlying laws or licenses make sense. It’s the result of massive regulatory capture, as industries unwilling to change just run to the gov’t and demand to be compensated even as their old business models are going away. At what point do people say it’s time to scrap this mess and start from scratch?