On April 25, 2018, the U.S House of Representatives took its first steps towards music industry reform by unanimously passing the Music Modernization Act (MMA).  This bill tackles the current, decades-old music licensing system, and attempts to bring it into the 21st Century.  Although it currently awaits Senate approval, the MMA enjoys wide bipartisan support and is poised to likely be passed.  Here are some key takeaways that help to explain how the MMA will affect both artists and music organizations alike.

Willing Buyer/Willing Seller Royalty Rates

Whether you’re an international popstar, or an aspiring songwriter, the Copyright Royalty Board still grants the same mechanical royalty rate to all songs.  The MMA would change that meaning that parties can freely agree to a royalty rate they both find fair.  Additionally, if a dispute happens over the royalty rate, the court hearing the case would be able to consider the total circumstances.  Meaning that if an international popstar sues for royalties, the court can consider the popstars fame as a factor is deciding an appropriate payment.

Judges Assigned by “Wheel”

No one wants the same judge hearing the same cases between the same parties.  The MMA would make sure this doesn’t happen.  Instead, Judges from the Southern District of New York will be randomly assigned to copyright cases.  This way, the judges who hear copyright cases will change from suit to suit.

Creation of a Music Licensing Collective

If you have a hard time collecting your royalties from digital performances, then the MMA’s creation of the Music Licensing Collective will make collecting easier. The Collective, which will be run by large publishers and independent songwriters, will manage unclaimed royalties for songs without songwriters of publishers. In turn, artists will have up to 3 years to collect their royalties making it easier for everyone to get paid.

Protection for All Sound Recordings

Thanks to a loophole in the Copyright Act, streaming services have gotten away with not paying for recordings made before 1972.  This is because the Copyright Act makes the states protect such recordings. Instead, the MMA would bring all sound recordings made before 1972 under federal protection.  This way, all songs will receive the same protections no matter when the artist recorded them.

While the MMA does not touch on every aspect of the music industry, it begins a necessary process that the industry must face.  Potentially, the MMA will be the first of many such reforms aimed at creating a more equitable music industry.

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