The Music Modernization Act Will Provide a Needed Update to Copyright Laws
WASHINGTON—This op ed by Rep. Doug Collins (R-Ga.) first appeared in The Hill on January 11, 2018.
I spent my northeast Georgia youth replaying tracks from “Bat Out of Hell” and “Hotel California.” And, of course, staples from Steely Dan. I welcomed the evolution from the 8-track to cassette to CD, but the LP and 45 vinyl predate even me. So, I was stunned to learn, as a member of the House Judiciary Committee—which has jurisdiction over intellectual property rights—that some of the copyright law governing music licensing was actually designed to regulate the player piano and has endured more than a century without meaningful update.
An overview of the music licensing landscape reveals that the status quo isn’t serving industry stakeholders, so the question becomes one of sustainability. Can music lovers count on a robust pipeline of tunes to carry them into the future? Absent substantive changes to the system that has disenfranchised creators, songwriters, publishers and even digital providers have their doubts. But efforts to unify these creators, digital streaming services and other key players around a path forward have faltered until recently. Very recently.
This December, countless hours of collaboration and cooperation came to fruition in a compromise that would be the most substantial update to copyright law since 1998. Today, our jeans pockets are more likely to be lined with iPhones than lint balls, yet the laws that currently regulate how tech giants like Spotify pay songwriters were cemented before the concept of digital streaming was born. The Music Modernization Act (MMA) would literally usher copyright laws into the 21st century.
The bill tackles four dimensions of music licensing. First, the bill addresses the fact that digital music companies regularly fail to pay songwriters and copyright owners properly for interactive streaming services. The trouble often arises from inefficiencies and information gaps.
Tech companies like Amazon Music, Spotify, and Google Play frequently file bulk Notice of Intentions (NOIs) with the Copyright Office that allow them to obtain a license for music for which they can’t locate ownership information. Since this process became available in 2016, some estimated 45 million NOIs have been filed with the Copyright Office.
This “bulk NOI” shortcut has taken millions of dollars in income out of the pockets of songwriters who rely on streaming services to find the proper owners of music and issue those owners prompt and appropriate payment. It’s also left tech companies legally exposed when they use music without knowing or paying its owners.
The MMA renovates the NOI process so that music creators get paid and digital companies reduce their liability and increase operational efficiencies. The legislation would establish a Mechanical Licensing Collective (MLC) that would accurately compensate songwriters for the mechanical royalties they earn through interactive streaming. In exchange, the collective would afford digital providers—which would fund the collective—with blanket usage licenses for songs.
The MLC would accomplish this by providing the digital services with efficient access to the information they need in order to know which songwriters to pay for which songs. Though songwriters have never had a seat at the music licensing table, both publishers and songwriters would sit on the board of the MLC to ensure it operates transparently.
The MMA also provides songwriters a chance to get fair-market mechanical royalty rates (the rate paid for the reproduction and distribution of a song) in the Copyright Royalty Board (CRB) proceedings that set those rates every five years. As it stands, songwriters can’t set prices for their own work. Instead, CRB judges determine royalty rates based on an outdated test that has depressed rates for decades. The MMA changes the standard the board uses to a “willing buyer/willing seller” consideration. In other words, the CRB would set the rates to reflect the market value of the corresponding use of a song.
Finally, the bill improves the process through which performance royalty rates (the rate paid to song writers when their music is played for an audience) are set for BMI and ASCAP, the two largest performance rights organizations. Currently, ASCAP and BMI cases are each assigned to a respective judge. The MMA would implement a rotation of the judges who decide ASCAP and BMI cases and would enable the rate court judges to consider relevant market-based evidence when determining performance rates for songwriters. Again, this change moves the industry toward a fairer, freer market for music licensing, and that benefits music creators, music providers and music lovers alike.
The MMA is unprecedented not only for what it sets out to do, but for who has signed on. The Digital Media Association (DiMA)—representing Amazon, Apple, Microsoft, Pandora, Rhapsody, Spotify and YouTube—and the National Music Publishers’ Association (NMPA)—representing U.S. music publishers and songwriters—both support the bill.
Songwriters groups including ASCAP, BMI, the Nashville Songwriters Association International, Songwriters of North America and others have also welcomed this legislation as a compromise that benefits a cross-spectrum of stakeholders.
So, too, have labels and artists, as reflected in the support of the Recording Industry Association of America, American Association of Independent Music, American Federation of Musicians, Screen Actors Guild‐American Federation of Television and Radio Artists, SoundExchange and the Grammys.