An expanded Music Modernization Act is scheduled for a vote in the United States House of Representatives on Wednesday. Though not without its critics, the bipartisan legislation has the strong support of most of the music industry, including the growing independent label sector.
The Music Modernization Act, to be put before Congress on Wednesday, combines three bills, including the original Music Modernization Act, which mandates a new organization to collect mechanical royalties and offers streaming music services protection from copyright infringement lawsuits filed after this last January. Also a part of the expanded legislation is the Compensating Legacy Artists for their Songs, Service, and Important Contributions to Society (CLASSICS) Act, Allocation for Music Producers (AMP) Act and part of the Fair Play Fair Pay Act which changes how the Copyright Royalty Board sets streaming rates.
While it’s often referred to as singular, the music industry has a history of being fragmented. The divisions begin with the matter of two copyrights for every recording and the fact that different laws govern the use of those copyrights, which results in drastically different revenue streams being generated for seemingly similar uses.
This dissimilitude in revenues and protections sometimes sets up an antagonistic situation between the recording side (artists, labels, producers, musicians, singers) and the publishing side (publishers and songwriters). Additionally, there are the performing rights organizations whose perspective sometimes differs from the publishers’ and songwriters’. On top of that, neither the recording nor the publishing side is monolithic. Tensions can, and often do, arise within either one.
We tend to not refer to the tech companies as part of the music ecosystem, but they are. Technological disruption was the main reason for the recording industry’s precipitous decline; and technology, combined with more ethical and equitable business models, are essential to its recovery. It’s the relationship between tech and the publishing and songwriting community that undergirds the Music Modernization Act (MMA). The so far precarious and litigative relationship between the songwriters/publishers and the tech companies has to end if we are to fully realize the growth potential of a global streaming economy. The MMA offers some resolution.
Legislation is rarely a perfect fit for all affected parties. The MMA is no exception, but with the CLASSICS and AMP acts and the proposed “willing buyer, willing seller” language, it will end the publisher/writer lawsuits, ensure legacy artists and producers are paid and permit a market standard for CRB (Copyright Royalty Board) negotiations.
Some significant issues are not resolved by the MMA — most notably the fact that terrestrial radio pays nothing for the use of recorded music. This is an egregious wrong that could easily be righted if it were not for the 98 years of obnoxious obstruction by the radio industry and the National Association of Broadcasters.
During the launch of the MMA, the entire music industry reaffirmed its support for the creation of an AM/FM terrestrial performance right that would provide fair compensation for sound recordings and for the establishment of a market-based rate standard for artists from satellite radio. We’ve made some progress with terrestrial radio, but it is clear to everyone that very soon it will be time to finally resolve the performance rights issue. But that is for another discussion.
There are aspects of the MMA we could bicker over. For example, independent publishers and labels are not represented and songwriters feel underrepresented. There is the issue of black box monies and how they are divided. There is also the lack of platform parity provisions — SiriusXM’s sweetheart deal compared to other streaming services and other anomalous rates.
Certainly, much work remains before the recorded-music industry can be considered equitable for all. Nevertheless, the MMA is consequential because all sides of the recorded music industry along with the tech companies are working together, setting aside longstanding differences to produce a positive incremental result. I hope that this is the first in an iterative series of joint efforts to build a fairer and better business for all. We are better together than we are apart.
- Richard James Burgess, CEO A2IM