Modernization Act is music to industry’s ears
Law is hailed as fairer system to compensate creators in digital age.
American politics may be polarized, but a new law signed by President Trump on Thursday suggests that liberals and conservatives agree on the need for a better system to compensate musicians and songwriters in the digital era.
The Music Modernization Act, co-sponsored by Sen. Orrin G. Hatch (RUtah) and Rep. Robert W. Goodlatte (R-Va.), is a response to the modern world of music streaming and satellite radio — platforms that did not exist when laws governing royalty payments to music creators and license holders were drafted decades ago.
The comprehensive music licensing bill corrects a number of pre-digital-era anachronisms. It creates a new independent entity that will license songs to companies that play music online, and then pay songwriters, including those who released hits decades ago before federal music copyrights took effect.
A broad coalition of musicians, music publishers, songwriters and broadcasters who pushed for the legislation hailed its passage as a historic achievement for an industry that has long shortchanged artists.
“As we celebrate the harmony and unity that got us here, we applaud the efforts of the thousands of performers, songwriters, and studio professionals who rallied for historic change to ensure all music creators are compensated fairly when their work is used by digital and satellite music services,” Recording Academy President Neil Portnow said in a statement.
After receiving unanimous approval in the House and Senate, the measure was signed into law by the president during a ceremony at the White House that was also attended by rapper and entrepreneur Kanye West, rap-rocker Kid Rock and Beach Boys founding member Mike Love.
“Our music licensing laws are convoluted, out of date and don’t reward songwriters fairly for their work,” said Hatch, who also is a musician and songwriter. “They’ve also failed to keep up with recent, rapid changes in how Americans purchase and listen to music.”
As a consequence, argued proponents, songwriters haven’t been properly compensated for their intellectual property, because of either outdated definitions or data inefficiencies. The goal: “To make it easier for music creators to make a living,” as a statement from digital accounting company Sound Exchange put it.
The new law “is the culmination of a gargantuan struggle that was resolved by an unparalleled alliance between all music industry stakeholders and the relevant tech companies,” said Richard James Burgess, chief executive of A2IM, a coalition of independent record companies. “In this digital age, more music is enjoyed by more people than at any time in the history of humankind. The signing of this bill represents a significant step toward better lives for music creators and those that support them.”
Musicians also praised the legislation.
“We are all ... very grateful to Congress for recognizing the logic, common sense and desire for fairness behind the Music Modernization Act,” said musician and producer Peter Asher, half of the ’60s duo Peter & Gordon and producer of recordings by Linda Ronstadt, James Taylor, Bonnie Raitt, Steve Martin, Neil Diamond and others. “The bill makes some very sensible changes to the rules and brings the business of music up to date, enabling it to address fairly issues such as streaming and all the new technologies of the digital age.”
Singer-songwriter Paul Williams, who also is chairman and president of AS CAP, one of several not for-profit performance rights organizations that collect and distribute royalties on behalf of songwriters, said in a statement, “American songwriters work tirelessly behind the scenes to create the music that fans all over the world enjoy.” The new law, he added, “brings us one step closer to a music licensing framework that reflects how people listen to music today.”
One of the main achievements of the law, advocates say, is that it guarantees that writers of pre-1972 songs receive federal copyright protection, allowing them to earn payments from streaming services, some of which have regularly played those songs without paying royalties.
The legislation also adds transparency to the amount that streaming services pay to rights holders and establishes a centralized music licensing entity to collect royalties.
As part of its mission, the entity is charged with creating and updating a detailed database of music composition copyrights to make it easier for online providers to pair songwriters and publishers with recordings.
“In most territories, there’s one entity that does all the licensing,” said Mark Goldstein, associate professor at USC’s Thornton School of Music and former senior vice president of business and legal affairs at Warner Bros. Records. “If you want a piece of intellectual property, you gotta go to that entity. You pay in.”
Not so in the U.S., he said, noting that there are multiple performance rights companies. “It’s a nightmare,” he said. “It’s inefficient.”