Music Modernization Act moves forwards in the US

May 2018

All sectors


The U.S. House Judiciary Committee has introduced the Music Modernization Act with the goal of encouraging innovation and rewarding creativity in this increasingly digital age. Some of the antiquated law surrounding copyright in the U.S. is considerably flawed, and after years of reviewing the system under the leadership of Committee Chairman Bob Goodlatte the new legislation incorporates elements of four previously introduced bills: the Allocation for Music Producers (AMP) Act, the CLASSICS Act, the Fair Play Fair Pay Act and an earlier version of the Music Modernization Act that was specific to songwriting. Following this step, the reforms will go before the full House of Representatives, the lower chamber of the U.S. Congress.


The MMA, which contains many important changes to music licensing laws, addresses the following key issues:


Creating a new collection entity to ensure that songwriters always get paid for mechanical licenses when digital services use their work

Establishing the same fair, market-based rate standard for both artists and songwriters whenever the government sets royalty rates

Closing the “pre-1972 loophole” so that digital services will pay legacy artists the compensation they deserve

Recognising producers and engineers in copyright law for the first time and protecting their right to collect royalties from SoundExchange

Improving the rate court process for ASCAP and BMI so that they can secure fair market value for their songwriters


What the MMA won’t do is force terrestrial radio stations to pay ‘needletime’, a royalty for the use of sound recordings, an anomaly that perhaps still reflects the lobbying power of the US broadcast industry.


The process that led to the development of the MMA began on June 10th 2014 at the House Judiciary Committee hearing on music licensing on Capitol Hill, Washington DC. Recording Academy President/CEO Neil Portnow testified before Congress and called for a music omnibus bill, which became the MMA that was introduced in the House of Representatives last week Tuesday (April 10th 2018).


The legislation has received a lot of bipartisan support, and NAB CEO Gordon Smith says it “addresses some of the core issues facing songwriters, recording artists, producers, music publishers, record labels and streaming services to the benefit of the entire music ecosystem.”


The Content Creators Coalition expressed a similar sentiment, stating: “for the first time in 20 years, there is real momentum in Congress to pass legislation that will help ensure that artists and songwriters are treated fairly while also ensuring that fans have access to the music they love.”


Further praise came from David Israelite – head of the National Music Publishers Association – who hails the MMA as “the most significant update to music copyright law in a generation”, and says it’s “a critical step towards finally fixing the system to pay songwriters what they deserve.”


Many music industry groups are hopeful that the MMA will increase royalty payments as a result of the implementation of compulsory and collecting society licenses, while representatives of the streaming sector are keen to receive a blanket license that will cover the mechanical rights in songs.


However, despite the outpouring of support for the legislation, the MMA does have its critics. According to the MIC Coalition, “this bill does not address the performance rights challenges faced by millions of licensees including restaurants, bars, wineries and breweries that regularly play and license music.”


Further disapproval of the bill is expressed in an opinion piece published in The Hill, by Sasha Moss and Meredith Rose. Among other criticisms their article reads: “Rather than harmonizing the system for everyone by putting these recordings under current federal copyright law, record labels have persuaded legislators to introduce a convoluted, piecemeal approach that will ultimately hurt those with the least political power. The more complex the law, the harder it is for artists – especially small, independent artists – to receive what they are due. And this is precisely how this bill would operate.” Moss and Rose also believe that input from a diverse range of stakeholders was lacking during the negotiation stage of the legislation.


Whilst there are valid points made on both sides of the fence there has undoubtedly been an “unprecedented” level of consensus surrounding this legislation, which “hopefully marks a new era of collaboration”, according to Ranking Member Jerrold Nadler. “Like any compromise, this bill is not perfect, but it is a major improvement over current law.”


This Update by Stacee Smith BSocSc (Hons), LLB (Hons)

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