This story is told in a way that seems almost too straightforward. A song is broadcast on a network. The rights are not cleared by anyone. Then comes a lawsuit. The actual version, however, is far messier, more educational, and, to be honest, more fascinating. It involves The Disney Channel, Broadcast Music Inc., and a decades-long dispute over how cable television pays for the music it uses.
It’s worth taking a moment to consider how The Disney Channel became embroiled in one of the most significant music licensing disputes in television history. For cable, the early 1990s were an odd time of transition. Networks were expanding quickly, and content was being purchased and repackaged at a rate that made paperwork seem more of a hindrance than a necessity. In that context, music rights—more especially, performing rights—became a true legal minefield. Disney Channel entered it head-on.
The U.S. District Court for the District of Columbia heard the case in 1991 after it was formally consolidated under the name National Cable Television Association v. Broadcast Music, Inc. Along with Black Entertainment Television and trade associations that represented a large portion of the cable industry, the Disney Channel was one of the plaintiffs. In essence, they claimed that BMI’s blanket licensing system, which charges a fixed fee for unrestricted access to a sizable library of copyrighted music, constituted an unjust trade restriction. The antitrust challenge was audacious. It was ineffective.
For those who don’t know, BMI is a nonprofit organization that was founded in 1939 by radio broadcasters who needed a practical way to pay composers for using their music. More than two million copyrighted compositions were included in BMI’s catalogue by 1991. From a broadcaster’s point of view, the blanket license it provided was both an expense and a convenience. You received access to a vast collection of music in exchange for paying a portion of your gross revenue.
This arrangement became more and more onerous for the cable industry, which was growing quickly and frequently airing syndicated content with licensed music that it hadn’t itself licensed. As a pay cable service, Disney Channel was purchasing, promoting, and broadcasting content, some of which featured music that it had not properly cleared.
After three weeks of live testimony and thousands of documentary exhibits, the court concluded that the blanket licensing system did not constitute an unlawful trade restriction. BMI prevailed. Disney Channel and the other plaintiffs were not successful. More importantly, the court ruled in favor of BMI’s counterclaims alleging copyright infringement against the program service plaintiffs.
Disney’s legal team might have sincerely thought the antitrust argument was valid. Blanket licensing had been contested for many years, reaching the Supreme Court in a CBS case in 1979. However, a winning legal theory differs from a sound one, and before Disney Channel entered the battle, this specific theory had already withstood several rounds of antitrust scrutiny. Observing a sophisticated company like Disney take that risk and lose makes one wonder about institutional overconfidence.
Disney’s music rights history takes on a new, almost intimate dimension with the parallel case involving Peggy Lee. In 1955, Lee received $4,500 for her original songs and voice acting in the animated movie Lady and the Tramp. Lee filed a lawsuit decades later when Disney started releasing the movie on home video without renegotiating or paying her in accordance with the terms of the original contract. She took home about $2.3 million. As a reminder that contracts drafted in one era don’t always take into account the technologies of another, it became one of the more talked-about performer rights cases in entertainment law.
When taken as a whole, these cases paint a picture that is worth considering. Disney adapted stories whose copyrights had long since expired, such as Cinderella, Pinocchio, and Snow White, to build a large portion of its early catalog. Over time, it developed into one of the fiercest protectors of its own intellectual property. Anyone who is paying attention can see how ironic it is that a company that profited so directly from creative works entering the public domain is now suing music licensing organizations.
Television music rights were never easy, and they became much more difficult during the cable boom of the late 1980s and early 1990s. Disney Channel discovered the hard way that it is not optional to clear music rights prior to broadcast. This lesson was expensive, both in terms of legal fees and the reputational damage of losing an infringement counterclaim. It’s not a formality. It is what establishes whether you are the defendant or the network.
