The Music Modernization Act is poised to reshape music copyright and compensation for a generation. But what exactly is the MMA, and how will it impact songwriters and publishers? We will be exploring these questions all this week on Hypebot with “The Music Modernization Act: Peril Or Promise?,” a series of articles and guest posts designed to explain and dissect the legislation. We begin with this simple question: What is the Music Modernization Act and who supports it?
Few would deny that copyright laws in the U.S. are broken and wholly inadequate for the digital age. The Music Modernization Act aims to fix that.
While the bill introduced in the Senate last week is getting all of the attention, the Music Modernization Act is really two parallel pieces of legislation introduced in the House and Senate, each with bipartisan backing. To become law, it must pass both Houses of Congress and be signed by the President.
Blanket Mechanical Licensing
At the core of this legislation is the creation of a blanket mechanical licensing system that would replace the current decentralized system. Administered by a new ‘super-PRO,’ all artist and publishers would register their tracks; and those, like Spotify, that want to use the music, would licence it there.
The legislation also amends the U.S. Copyright Act to change how the Copyright Royalty Board sets rates from using a legal standard to one that approximates a willing buyer/willing seller market rate.
How copyright rate disputes are handled will also change. Instead of always being decided by the judicial panel that has watched over BMI and ASCAP for decades, random federal judges would hear each case, presumably providing a fresher perspective. The MMA also eliminates the mandate barring rate court judges from considering sound recording royalty rates as one benchmark when setting music publishing royalty rates.
Powerful Music Industry Supporters
It would be easy to believe that the Music Modernization Act has universal support. Twenty-three major music industry trade groups and companies have endorsed the MMA, including the RIAA, A2IM, NMPA, BMI, ASCAP and SoundExchange. The Internet Association which represents Google, Amazon, Microsoft, Spotify and more that thirty other major tech companies has also signed on. Even the National Association Of Broadcasters, which initially opposed the legislation, has announced its support, after meetings with the performing rights organizations.
“The recorded music industry speaks with one voice in support of the Music Modernization Act and to further rationalize copyright law.,” said A2IM CEO Richard James Burgess. “This legislation brings us one step closer to our goal of creators and copyright owners being compensated fairly for all uses of their work. We urge Congress to move forward on these important reforms, to seek market rates for all music streaming, and to demand that American artists be paid for terrestrial radio performances.”
“The large print giveth and the small print taketh away.”
But support for the Music Modernization Act is not universal.
Music industry attorney and artists advocate Chris Castle quotes Tom Waits: “The large print giveth and the small print taketh away.” In other words, the devil is on the details; and other industry attorneys, some music publishers, including Wixen, who is currently suing Spotify for $1.6 billion, and the Songwriters Guild of America (SGA) don’t like what the see.
The MMA is “one of the first times or the very first time in history that any Government has acted to sanction the creation of a music copyright licensing and royalty collective over which creators themselves would not share at least equally in governance,” writes SGA president Rick Carnes. “That is a concept that we cannot support.”
“serious fairness, transparency and practical issues”
Other problems according to Carnes include, “serious fairness, transparency and practical issues related to the proposed processes of setting up the licensing collective, the distributing of unidentified monies on a market share basis and the need to better protect music creator economic rights in that context, the vague nature of any opt out mechanisms, the granting of relief from statutory damages liability to prior willful infringers, the scope of the musical composition database (including songwriter/composer information), the provisions concerning shortfall and other funding aspects of the collective, the absence of direct distribution of royalties by the collective to songwriters and composers, the vague nature of the audit activities to be optionally conducted by the collective, and the complications in that and other regards raised by obvious conflicts of interest issues.”
In short, the SGA and others, see potential problems throughout much of the legislation.
We’ll explore these issues tomorrow and throughout the week.