A decade-long legislative effort and an epic industry-wide negotiation came to a historic happy ending on Thursday as President Trump signed the Music Modernization Act. The omnibus legislative package, which passed both houses of Congress unanimously, reforms copyright law to work better for all key constituents in the age of streaming music.
“This is what we as an industry have been working toward for so long," said Chris McMurtry, head of music for Nashville-based Exactuals. He's an expert in how music royalties are tracked and distributed. He’s also a composer and creator himself. “This is a big win not just for us artists and rights holders, but it’s a big deal for tech as well.”
That’s because the streaming and distribution platforms - Spotify, Apple, Google and Amazon especially - agreed to a huge tradeoff that made the MMA possible. They will pay for the long-sought goal of a central, industry standard database of who owns every work. That Mechanical Licensing Collective will ensure rights holders can be found and connected to their rightful payment streams in a streamlined way.
In exchange, digital distributors will be able to obtain blanket licenses for all music in a one-stop shop, saving vast money and manpower on negotiating individual deals with music publishers and labels.
The law also reforms the way rates are set for digital music royalties, allowing assessment of market forces into the formula. A peculiar loophole will close, facilitating royalty payments on recordings from before 1972. And record producers and engineers will be worked into digital royalty streams for the first time.
See a concise summary of the new law here.
Selected industry statements:
"The signing of the Music Modernization Act into law, by the President, is the culmination of a gargantuan struggle that was resolved by an unparalleled alliance between all music industry stakeholders and the relevant tech companies.” - Richard James Burgess, CEO of the American Association of Independent Music
“For creators, it means getting paid more fairly. For those who recorded music before 1972, it means assurance you'll get paid for your work. For songwriters, publishers and producers it means making the digital economy work for you.” - Michael Huppe, President and CEO of SoundExchange
“What an amazing achievement for creators and their commercial partners to have come together in solidarity, and joined with Congress, to make long overdue copyright reform a reality. This is the start of an exciting new era for the entire business of music. Bravo!" - James Donio, President of the Music Business Association
“We can look forward to a variety of long-overdue reforms that will make it easier to negotiate for and collect fair royalty rates while also establishing once and for all that digital services must pay for the use of pre-1972 recordings. In addition, it ensures independent publishers and songwriters a seat at the table for the new mechanical licensing collective.” - Association of Independent Music Publishers
