Artists threaten to boycott SiriusXM over Music Modernisation Act objections  – UPDATED AS ACT IS PASSED

October 2018

The Music Modernisation Act (MMA) is hot stuff in America at the moment and it plans to do what it says on the tin. It is looking to reform US copyright law, amongst other things it seeks to resolve the “small” issue of satellite radio stations not being required to pay music royalties for playing pre-1972 tracks. Other proposals include a  fix for the fairly muddled mess on how mechanical royalties are paid Stateside and reforms to the way the US Copyright Royalty Board and rate courts determines what are fair royalties for compulsory and BMI/ASCAP licences.

 

There are two sides to every story, in the case of the MMA (the so called ‘CLASSICS’ Act element) they can be summed up very easily. On one hand you have the satellite radio stations that have not been required to pay royalties for their use of pre-1972 tracks, why should they now? On the other hand you have the artists of the pre-1972 tracks that have been without royalties payments for quite some time!

 

SiriusXM is one of these satellite radio stations, in fact it operates three satellite radio stations, and it is very opposed to some elements of the MMA. This has not gone down well with musicians in the US.

 

In an open letter addressed to SiriusXM’s parent, Liberty Media, which was written by Ross Golan and ‘Legends CC-ed here’ – 150 artists and executives have come together to express their plans to boycott the radio station in favour of the Music Modernisation Act. They include Sir Paul McCartney, Don Henley, Carly Simon and Katy Perry

 

Variety have published the letter and it is available here: (https://variety.com/2018/music/news/katy-perry-pink-max-martin-artist-letter-siriusxm-boycott-music-modernization-act-1202944141/)

 

Golan sees the MMA as being an opportunity for SiriusXM to take a “leadership position” and goes on to ask SiriusXM to be brave and take credit for being the heroes who helped the MMA become historic law!

 

As is often the way in a story of two tales, SiriusXM and Golan do not see eye to eye. In an open response, which Variety has published here (https://variety.com/2018/biz/news/siriusxm-responds-artists-letter-boycott-1202945226/) SiriusXM explains that it does not oppose the MMA,  but rather it has proposed three amendments.To summarise:

 

Firstly, SiriusXM wants the Act to recognise that in fact it has already licensed all pre-1972 tracks which it uses.

 

Secondly, SiriusXM explains that it feels the 801(b) standard (a statutory method of deterring music royalties) is the fairer standard and should be used in rate setting proceedings. It should be noted that the 801(b) standard consists of four factors, one of which is “to maximize the availability of creative works to the public” and generally results in a lower royalty fee. However, SiriusXM states that it is happy to continue with the “willing buyer/willing seller” standard which satellite radio stations in the US are currently subject to. The “willing buyer/willing seller” standard applies a market based rate pursuant to section 114 of the Copyright Act which “would have been negotiated in the marketplace between a willing buyer and a willing seller.” But which is not all too often updated. Accordingly SiriusXM wants the Music Modernisation Act to update these rates.

 

Thirdly, is asking what looks like a simple question: “Why are we changing the rate court evidence standard for musical compositions in this legislation so that it gives another advantage to broadcasters over satellite radio and streaming services?” This element relates what rates courts can/ cannot look to when setting music royalties. In short,

 

SiriusXM is worried that the changes are going to increase its royalty rates but keep the rate low for broadcasters.

 

So three small objections that on the face of it do not seem to be too unreasonable. Who’s right who’s wrong – I don’t know but the US sure does need to modernise its music laws.

 

Samuel O’Toole (www.lawditmusic.co.uk)

 

UPDATE  19.09.2018: The United States Senate has unanimously passed the Music Modernization Act. The bipartisan bill was cosponsored by more than 80 Senators. The Senate-passed bill now awaits reconsideration by the House and signature by the President. Mitch Glazier, President of ther Recording Industry Association of America (RIAA) said: “As legendary band the Grateful Dead once said in an iconic pre-1972 song, ‘what a long strange trip it’s been.’ It’s been an epic odyssey, and we’re thrilled to almost be at our destination.”

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