The Music Modernization Act has been unanimously passed by the House of Representatives and is set to be introduced to the Senate. Based on the overwhelming support for the bill in the House, it is expected to pass through the Senate as well. However, there is still a chance it may not.
Why is this important?
Are you a songwriter? Are you a publisher? Do you work in the music industry? If the answer to any of those questions is yes, stay tuned, because this bill could directly affect you!
By combining 4 separate legislative initiatives into one bill, the Music Modernization Act will change the way music rates are set and how artists are paid.
Current music rate laws require The Copyright Office to provide a Notice of Intent to the songwriter whenever their song is used. This has proven to be inconvenient for both parties. The Copyright Office has to notify the songwriter each time their song is used, which prevents the songwriters from being compensated in a timely manner. In addition, the Copyright Royalty Board is required to apply a legal standard to determine rates that do not reflect the market value. This process is unfair to those in the music industry seeking the necessary license to reproduce a song. The courts are not required to consider free-market conditions when determining rates for the license and have limited guidelines for deciding what the rates should be.
Other flaws in the current court system include the assignment of judges to cases and prohibition of using other sound recording royalty rates as consideration when deciding the case at hand. The American Society of Composers, Authors and Publishers and Broadcast Music, Inc., are each assigned to a single, respective rate court judge. All cases are adjudicated before each performance rights organization's respective assigned consent decree judge. Using the same judges to decide on each case poses an issue of potential bias, as impressions from previous cases could affect the case at hand. Section 114(i) of the Copyright Acts currently in place prohibits rate court judges from considering sound recording royalty rates to be used as consideration. This is problematic for songwriters as the current system inhibits them from obtaining fair rates for their music.
What could change?
The Music Modernization Act proposes a reform to Section 115 of the Copyright Act. The reform consists of a publicly accessible database using housing song ownership information to match songwriters and publishers. Additionally, the Copyright Office will no longer be required to provide a Notice of Intent to the songwriter when their song is used. This way, the songwriter will be compensated sooner by the Copyright Office. The database will be accessible to digital services that pay for a Mechanical Licensing Collective, a blanket mechanical license that would provide them with access to interactive streaming or digital downloads of all musical works. This way, digital services do not have to match songwriters and publishers with recordings because the database would already provide their information. The database would benefit publishers as well, since they would be able to claim rights for songs not matched to songwriters. Along with songwriters, they would also have an audit right, which is currently lacking under Section 115.
The previously mentioned issue with the current legal system is that the Copyright Royalty Board must apply a legal standard that does not reflect market value when determining rates. The Music Modernization Act solves this problem by establishing a standard for courts to consider free-market conditions when determining rates for licenses required for the reproduction of songs. Having one judge assigned to all rate cases can be problematic, which is why the Act proposes a “wheel” approach. District judges in the Southern District of New York will be rotated for rate setting disputes and will be randomly assigned from the wheel of district judges. The American Society of Composers, Authors and Publishers, Broadcast Music, Inc., and licensees can go before any judge in the Southern District of New York for rate setting disputes on a rotating basis. This prevents judges from applying impressions from prior cases on the one at hand. Repealing Section 114(i) of the Copyright Acts will allow for the presentation of other aspects of music ecosystem for judges to consider when setting rates for the musical works.
Challenges to the Music Modernization Act
Shortly after the House unanimously passed the Music Modernization Act, Senator Wyden introduced the Accessibility for Curators, Creators, Educators, Scholars and Society (ACCESS) to Recordings Act, an alternative bill which could slow down or prompt negotiations to change the new bill. The Music Modernization Act will let those who have rights to songs recorded prior to 1972 collect money on these recordings until 2067. The ACCESS to Recordings Act will make it so these works will enter public domain much sooner: either 95 years after their release or 120 years after they were recorded, whichever comes first. This alternative bill would also cause any of these recordings to lose all of their protection currently held under state law. It has been suggested that any reduction in state law copyright protection would constitute a “taking” and therefore be unconstitutional.
Keep a close eye on the Music Modernization Act and the ACCESS to Recordings Act, soon enough they could change or become the current law!
What can YOU do?
If this is something that matters to you, the most effective think you can do is contact your US Senator’s office and let them know that you want them to take action on Music Modernization, and protecting the rights of artists in this new age. You can do so by visiting the US Senate Website here: https://www.senate.gov/general/contact_information/senators_cfm.cfm