The Music Modernization Act Has Been Signed Into Law

Earlier today, the Music Modernization Act was signed into law at the White House in the presence of musicians like Kid Rock, Jeff Baxter, Mike Love, and other recording artists. Comprised of three main pieces of legislation unanimously passed by Congress, the law promises to modernize copyright protections for musicians and artists in the digital and streaming age by repealing Section 114(i) and revamping Section 115 of the U.S. Copyright Act.

The MMA streamlines the music licensing process by doing away with the compulsory licenses (Notices of Intent, or NOIs) that creators had to file in order to distribute their music. In their place, the law establishes the Mechanical Licensing Collective (MLC), which will be run by representatives of major music labels, independent labels, and self-publishing artists. The MLC will grant members a blanket license in exchange for their participation that allows for the reproduction of their music in tangible formats (like records) and digitally (via streaming service). The collective will also be required to maintain a public database of musical works and their owners.

The MMA also changes the way that royalty rates are set. Under the Copyright Royalty and Distribution Reform Act passed by Congress in 2004, anyone could seek a license to use a musical work in exchange for a royalty, the rate of which was set by the Copyright Royalty Board. However, the Board's ability to change the rates was limited by the standards of the 2004 law, which didn't take into consideration basic market variables like demand. The MMA will update that, so that the new royalty rate reflects the free market demand.

40 Years of Music Industry Revenues, via Visual Capitalist

A second major piece of the legislation is the Allocation for Music Producers Act (AMP), which improves royalty payouts to producers and engineers from SoundExchange when their recordings are used on satellite and online radio. This is especially notable, being that it's the first time producers have ever been mentioned in copyright law.

The major third part of the legislation is the CLASSICS Act (Compensating Legacy Artists for their Songs, Service, & Important Contributions to Society Act), which further protects sound recordings from before 1972 in an effort to make sure that rights-holders are receiving royalties for pre-'72 recordings.

While many artists have spoken up in support of the CLASSICS Act—including Mary Wilson, founding member of The Supremes, and others whose work was released in the mid-20th century, especially—others have taken issue with this portion of the law. The counterargument is that CLASSICS will decimate the amount of historical music that has long been part of the public domain, entitling publishing companies, relatives, and others far removed from the creation of historical songs to demand payment for them.

There are also other concerns here that the MMA doesn't totally eradicate, like the fact that though the MLC will collect royalties for streamed songs, it's only obligated to work to match those royalties with their respective artists for three years. After three years, the MLC can distribute unclaimed royalties to its members based on marketshare—and once that money is distributed, there's no way to reclaim it. This means that publishers that had nothing to do with the creation of the music could be paid for it after a relatively short period of time, likely at the expense of unsigned, self-published artists unconnected to the MLC.

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