Is the Law Finally Catching Up to Music and Technology? The people have spoken, and the legislators are all ears and we could be on our way to a win for music composers and publishers nationwide. I present to you – the Music Modernization Act (“MMA”)! Let’s be real, the Copyright Act is antiquated. Originated in 1906, revamped in 1976 and here we are over forty (40) years later, with major advancements in science, technology, math and engineering that have had huge effects on the music industry and how music is monetized, and the law just doesn’t speak to it. But it seems like it will address some of these changes in the digital world very soon, with this Music Modernization Act. Now, let’s see all of what the MMA entails. I like that acronym by the way! It sounds like a force to be reckoned with.
The first goal of the MMA is to centralize the licensing of mechanical royalties and create an entity (let’s call it the “New PRO”) that issues blanket licenses, the same way in which the Public Performance Organizations (PRO) do for public performance royalties. All music rights holders would have to register their works with the New PRO and music providers (e.g. Pandora, Spotify, etc.) would have to obtain the blanket license from the NEW PRO to make use of the works. This will create a music warehouse where virtually all music can be accessed by all.
The second goal of the MMA is to amend the Copyright Royalty Board’s manner of setting mechanical rates. It seeks to change it from a mandated legal standard to one that is reflective of rates negotiated between willing buyers and sellers of the rights. This alone, creates a better opportunity for music creators and rights holders to make money off their music, because their earning potential will now take market value into consideration as opposed to a legal standard that does not.
The third goal is to modify how copyright royalty disputes are handled. Instead of ASCAP and BMI being assigned to their designated judge, the issues will be heard by a different federal district judge on a rotating basis. The idea is that they will bring a new and fresh perspective to issues presented.
Lastly, it eliminates the requirement for judges to consider sound recording rates when determining and setting publishing rates.
The overarching cited goal of the MMA is to put more money in the pockets of the music creators. So far, it has received a lot of support from over twenty (20) major music industry groups and organizations, including the Recording Industry Association of America, Sound Exchange, ASCAP, and BMI to name a few. Everyone is not a fan, however. Wixen, a major music publisher, who is currently in litigation with Spotify for copyright infringement, is on the opposing side of the MMA. Opposition mainly comes from the minor details of the MMA, which arguably do away with what the Act is set out to protect. Wixen’s issue is that the copyright owners will not have any say in governance of the law and its application. The president of the Song Writers Guild of America (SGA) vehemently opposes the legislation. He says, and I quote, “[there are] 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.”
I have yet to see the proposed legislation myself, so my opinion on the MMA is reserved until I have. I really do hope that it is something truly for the artists. It’s about time for the creators to be more in control of their creations.
Lerae Funderburg, Esq. is the Managing Attorney at Funderburg Law, LLC, an Atlanta based entertainment law firm. Lerae has almost 10 years of experience in entertainment law in both music law and film law. As an entertainment lawyer and blogger, Lerae keeps her viewers and subscribers up to date with entertainment legal news, especially in the areas of music. If you are local to Atlanta, call and set up a consultation! She would love to hear from you!