The Music Modernization Act represents a substantial bipartisan attempt to overhaul America’s music copyright laws, which in part dated back to legislation from 1909, as it recently passed the US House of Representatives with a unanimous vote, and is now up for vote in the Senate.
The Act predominantly updates licensing and royalty rules in response to the rise of the music era of streaming, which made it incredibly difficult to control the dissemination of files once in the consumers hands and afford creators proper compensation for their work.
The Bill would reform the music licencing landscape in several respects, those principally being:
- Ending the s. 155 Notice of Intent (NOI) process from the Copyright Act 1976, which can prevent songwriters from being compensated in a timely manner for uses of their works. Established instead will be a singular Mechanical Collecting Society (MCL) as artist and publisher-run collectives that handle blanket licencing issues directly with Apple, Spotify, and other major publishers in a more streamlined way, making it easier for the creators to identify the use of their work and obtain compensation from the online music providers.
- When determining rates for the licence to reproduce a song, the current method involves the Copyright Royalty Board (a government body) setting the statutory rate at which the licence will be sold based on a legal standard. The Act would replace this with a method which involves a randomised federal rate court to consider free-market – willing buyer/willing seller – conditions when determining the rates.
- Performance Rights Organisations and songwriters would be able to provide evidence regarding the state of the music ecosystem to the federal rate courts for their consideration when setting performance royalty rates, allowing them to obtain fairer rates for the public performances of their musical works.
- Artists with records from before 1972 will now have copyright protection and be able to claim compensation for their music being played on digital radio.
Many in the music industry have hailed its introduction, acknowledging the benefit this will have for artists, publishers, producers and labels in ensuring they are compensated fairly and effectively for their work.
However, some resistance has been issued by the third-party agencies that currently identify rights owners and conduct the admin work to ensure they are paid. The creation of a singular MCL, they argue, would represent a monopolised marketplace, and indeed would mean less work for these agencies. Thus, an amendment to the Act has been proposed that would ensure they continue to be required by streaming services to deal with licencing and royalty issues. Critics argue this proposition will derail the Act, undermining the very principles it set out to fulfil.
It remains to be seen what the decision of the Senate will be, particularly with this new proposed amendment. Nonetheless, it cannot be understated the significance of this Act for the music copyright landscape in America, and what effect it may have on the music industry as a whole.
