Congressmen Doug Collins (R-GA) and Hakeem Jeffries (D-NY) will today (Dec. 21) introduce “The Music Modernization Act Of 2017” (HR 4706), legislation designed to improve songwriter royalty rates from digital streaming companies while making the music licensing process more efficient.
“This will be the first significant copyright legislation for songwriters in over 20 years,” says Nashville Songwriters Association International (NSAI) Executive Director Bart Herbison.
The bill instructs the Copyright Royalty Board (CRB) to utilize the “willing-seller, willing-buyer” rate standard when setting songwriters’ mechanical royalties. It further establishes that there is a mechanical royalty payment due to songwriters from subscription music services, something that has been subject to recent court challenges.
U.S. Senator Lamar Alexander (R-Tenn.) says, “Songwriters are the lifeblood of Music City, and their paychecks ought to be based on the fair market value of their songs – so that when they write a hit heard around the world, you can see it in their billfolds,” Alexander said. “We intend to introduce legislation that we have been working on for months to help songwriters receive fair market compensation early next year, and we will be including in our legislation many of the same provisions that were in the House bill introduced today.” Tennessee Senator Lamar Alexander and Utah Senator Orrin Hatch were noted as guiding forces throughout this process, years in the making. A Senate version of the legislation will be introduced in early 2018.
“This legislation has been years in the making, represents compromises with digital streaming companies and reflects substantial progress in the way digital mechanical royalties for songwriters are determined,” said NSAI President Steve Bogard. “When we begin the next CRB proceeding we will be able to actually fight for what songwriters would be paid in a free market.”
The ”MMA of 2017” will create a new entity that will establish and administer the blanket digital mechanical licensing process. It will be governed by music publishers and songwriters and represent all songwriters equally and at no cost. Importantly songwriters will, by statute, receive more than half of all unclaimed funds under the act. The new agency will begin operations in January two years after adoption of the bill.
The unmatched/unclaimed works component of the legislation allows streaming companies to avoid unnecessary litigation if they pay royalties earned by any song they stream while the new entity endeavors to find any unknown songwriters who are due payments.
It is important to note that the “Notice of Intent” (NOI) program administered by the U.S. Copyright Office will be eliminated. Tens of millions of mass NOI’s have been served on the Copyright Office since the program’s inception in the Summer of 2016, often resulting in copyright owners not being identified.
“The structure of the new administrative entity and its unmatched/unclaimed component illustrates that the music industry can provide solutions to music licensing and data issues,” adds Herbison. “We are optimistic that the process of voting on this legislation will begin soon. Streaming companies Apple, Amazon, Google, Pandora and Spotify were part of the creation of the ‘MMA of 2017.’ Going forward we all must continue to work together to solve problems in the music eco-system.”
The MMA also makes an important change to future ASCAP and BMI rate court proceedings by calling for randomly selected and rotating judges rather than judges who are presently appointed for life.
In a joint statement from NMPA President & CEO David Israelite, ASCAP CEO Elizabeth Matthews, BMI President & CEO Mike O’Neill, NSAI President Steve Bogard and SONA Executive Directors Michelle Lewis and Kay Hanley, strong support has been expressed for this new bill.
The statement reads; “We strongly support the introduction of the Music Modernization Act which represents months of collaboration and compromise between the songwriting and tech industries. This legislation enables digital music companies to find the owners of the music they use and reforms the rate setting process for performing rights, ensuring that songwriters and music publishers are paid faster and more fairly than ever before. For too long, digital music services have taken advantage of the ‘bulk NOI’ process and often failed to find the correct creators to pay, and now – by working together – this bill ends this practice by creating a private-sector system where money will no longer be lost to inefficiencies and lack of information. The bill also improves how mechanical royalty rates are calculated by introducing a willing-seller/willing-buyer standard.
“On the performance rights side, the bill also replaces the current rate court system with the random assignment of judges used in most federal court cases, and allows the rate courts to review all relevant market evidence into the valuation of how songwriters are compensated. We thank Congressmen Collins and Jeffries for their leadership in striking this balance that improves and modernizes our outdated licensing system and gives songwriters the ability to be paid what they deserve across all platforms that use music, including the growing interactive streaming services.”
Other original co-sponsors include: Diane Black (R-TN), Marsha Blackburn (R-TN), Steve Cohen (D-TN), Joe Crowley (D-NY), Ted Lieu (D-CA), Pete Sessions (R-TX). (More may be added.)
Michael Eames, President of the Association of Independent Music Publishers (AIMP), also commented on today’s introduction of the Music Modernization Act. “The Association of Independent Music Publishgers (AIMP) commends and applauds U.S Rep. Doug Collins (R-Georgia) and U.S. Rep. Hakeem Jeffries (D-NY) on their hard work and support of songwriters, composers, and music publishers with the introduction today of H.R. 4706, the Music Modernization Act. As publishers, our job is to create value for these artists by ensuring they are paid a fair rate for their works and receive it in a timely fashion. This legislation helps us do just that, and the fact that it is being embraced by such a wide range of organizations from all sides of the interactive streaming market is a testament to its necessity.”
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