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All-new Music Modernization Act glues together American music proposals

By | Published on Wednesday 11 April 2018

US Congress

An all-new Music Modernization Act was unveiled in US Congress yesterday, which is something of a greatest hits featuring most – though not all – of the music-related legislative proposals that have been circulating around Washington of late. Including, in case you wondered, the Music Modernization Act. Together this legislative mash up constitutes “the most significant update to music copyright law in a generation”. Says someone.

The original Music Modernization Act sought to fix the way streaming services license song rights Stateside, the current system being – to use the legal jargon – “fucked up”.

Streaming services need to exploit both the performing right and the mechanical right elements of songs. In most countries there is a collecting society or collecting societies that can provide said services blanket licences covering both elements.

This means that where a service doesn’t have a direct deal in place with a music publisher, it can usually still legally stream a song under its collecting society licence or licences. It’s then the job of the society or societies to work out who the hell needs paying when any one song is streamed and to then pass the royalties on to that person or company.

Those blanket licences are hugely valuable to streaming services, because they don’t know who controls the rights in any one song, many of which have multiple owners. They often don’t even know what song is contained in any recording beyond what the track title tells them. With no central publically accessible music rights database to hand, blanket licences enable streaming services to pass on the problem of working out who to pay to a society.

However, in the US, while blanket licences can be secured for performing rights via the collective licensing system, no such licence exists for mechanical rights. US copyright law obliges rights owners to provide a mechanical rights licence at a set rate, but the service still needs to work out who to pay that set rate to. Most services have been struggling with that task, leaving songwriters unpaid, and digital services sued over those missed payments.

The MMA will introduce both a collecting society and a blanket licence for mechanical rights in the US for the first time. Which will be great for the streaming services. As a quid pro quo for music publishers and songwriters, the way rates are set whenever song rights are licensed via a compulsory or collecting society licence will be reformed to better reflect market realities. Which should mean better rates for the music industry.

The all-new MMA still includes all that gubbins. But it also incorporates elements of three other bits of music legislation that have been presented in Congress of late. That includes the CLASSICS Act, which seeks to ensure recordings released before 1972 are paid royalties by online and satellite radio services. For technical reasons, at the moment there’s an argument that that royalty obligation in the US only applies to recordings released since 1972.

The other elements of the new MMA include provisions to benefit record producers and sound engineers, originally contained in the AMP Act, and a few lines applying the tweaks to how compulsory licence royalty rates are set to sound recordings as well as songs, something originally contained in the Fair Play Fair Pay Act.

Earlier this year various music industry groups gathered to speak out in support of the plethora of music copyright proposals on the table in Washington, including those not directly relevant to their specific members. The hope is that by combining all those proposals into one big act the process of making them law can be simplified, improving the chances of the new legislation being passed in the not too distant future.

Although there is a lot of support across the wider music industry for the MMA – and most digital services are also backing it all, them being eager to get that blanket licence for mechanicals – there remain critics of the proposals. Some songwriter groups remain concerned about the governance of the new mechanical rights collecting society. And some music users reckon the MMA will simply result in an increased royalty bill.

It’s interesting that the core element of the aforementioned Fair Play Fair Pay Act – forcing AM/FM radio stations in the US to pay royalties to artists and labels, like radio stations do in much of the rest of the world – is not part of the all-new MMA.

The radio business has lots of friends in Washington, and the decision to not include those provisions in this big music copyright overhaul suggests the music industry’s lobbyists feared that including AM/FM radio royalties in the proposals would just scupper the entire bill as it went through Congress.

Safe harbour reform, which has also been a big talking point in the music community in the US, as elsewhere, also isn’t part of the overhaul, very possibly for the same reason.

The new MMA was introduced in the House Of Representatives yesterday by House Judiciary Committee Chairman Bob Goodlatte, among others.

“Our nation’s copyright laws, and the exclusive rights they grant to artists and creators, have made the US the world leader in creativity”, he said. “However, there is little doubt that our copyright system faces new challenges today. One of the top priorities of my chairmanship has been to conduct a wide review of our nation’s copyright laws to determine whether the laws are still working in the digital age”.

He went on: “I am pleased that after extensive discussions between members and interested stakeholders we have produced a legislative package that will make important and long overdue updates to our copyright laws to ensure American music creators are properly recognised and rewarded for their works. The Music Modernization Act, which is the first major update to our music licensing laws in decades, is vital to promoting American creativity and innovation in the digital age”.

A plethora of organisations within the music and streaming sectors have already issued statements in support of the all-new MMA. We’ve selected you a top five. Hey, I wonder who it was who dubbed these reworked proposals “the most significant update to music copyright law in a generation”. Let’s find out shall we?

Straight in at number five is the latest quote from ASCAP chief Elizabeth Matthews who reckons that “today’s reintroduction of the Music Modernization Act signals we are one step closer to reforming our outdated music licensing system and providing songwriters a better future. We thank [Goodlatte et al] for their leadership and keeping America’s songwriters a priority”.

Meanwhile sitting at number four is the Association Of Independent Music Publishers, which had its execs Michael Eames, John Ozier and Alisa Coleman deliver a statement as one in perfect unison: “For too long, songwriters and publishers have been forced to deal with an outdated music licensing system that doesn’t work in today’s online world. Now for the first time, the music and technology industry, as well as lawmakers from both sides of the aisle, have come together to address these issues and give rightsholders more control over the licensing and collection of their works. We strongly urge Congress to pass this measure”.

Who’s this at number three in the quotage charts? It’s only the Content Creators Coalition: “The Music Modernization Act is the most important legislation for musicians and songwriters in 20 years. It is nothing short of a major victory for artists – for performers, songwriters, and music creators of all stripes. While we have proposed ways that the legislation can be improved, and it doesn’t include some necessary pro-artist reforms – those that would empower artists to fight back against platform monopoly abuses by updating the DMCA or level the playing field with an AM/FM performance right – neither our enthusiasm in support of this legislation nor our fight for those reforms will diminish”.

Just missing a place at the top spot in our quotes chart is the all-important streaming sector, which had its trade group the Digital Media Association say: “We support the Music Modernization Act because it brings greater transparency and creates a blanket license, which is critical to a modern licensing system. Streaming services have literally saved the music industry, delivering better experiences at a better value, and growing revenue for creators. We are glad to see Congress is looking to the streaming future, and moving away from the music mess of the past”.

Which is all well and good, but not good enough to win a place at the top of the quotage list. That accolade goes to David Israelite, boss of the National Music Publishers Association. And not just because he called the MMA “the most significant update to music copyright law in a generation”. Though he did do that.

“The Music Modernization Act is the most significant update to music copyright law in a generation”, says he, “and represents unprecedented compromise among songwriter, music publisher, artist, record label, and digital music groups. The Music Modernization Act will help ensure a healthy digital music ecosystem, most importantly for the songwriters who create the music that makes such an ecosystem even possible. It was not easy to achieve a consensus package, but we are grateful for music champions [in Congress] who have worked to foster agreement and we are eager for them to move this bill forward”.

Good times. We now look forward to quotes from all the MMA haters so we can publish the contrary top five.