After years of inertia and frustration over low royalty rates and out-of-date rules in the streaming era, songwriters are finally hearing promising news out of Washington DC.
Unlike just about anything else on Capitol Hill, the Music Modernization Act has deep support from both parties and virtually all of the stakeholders in digital music, from songwriters and publishers to tech giants. It was introduced in the House in December and in the Senate last month by a bipartisan group, including Tennessee’s Lamar Alexander and Bob Corker.
John Barker, CEO of Brentwood based Clearbox Rights, an intellectual property administration company, says a six-year process climaxed last year with eight months of negotiations.
“What they’ve come out with is something that the industry can look at and say: You know what, this is better than what we have now, maybe the best that we can do. I may have some questions about it as other people do, but I think it’s a great improvement to what we’ve had.”
Two key changes are proposed. First is to radically simplify the way interactive services like Spotify, Apple Music or Tidal (or future competitors), obtain licenses to stream songs. Today it’s an expensive and tedious publisher-by-publisher process for these Digital Service Providers (DSPs) as the law calls them. Proposed is a Mechanical Licensing Collective with a unified database of song ownership and blanket licensing for all works in a one stop shopping scenario.
A database of creators and ownership is something the industry has tried and failed to do on its own for years, but in this case, the DSPs have agreed to pay for the initiative, in exchange for limits on their liability if sued for unauthorized uses. If any issue has cropped up that threatens the kumbaya behind the MMA, it’s protection of DSPs from certain lawsuits.
Second is a new principle for setting streaming rates based on a free-market standard, or at least an educated guess at what rates would result. Barker says the three judge panel that determines how much streams are worth, the Copyright Royalty Board, has been constrained in what it could consider. According to the new plan, he says, “As the CRB reviews rates, they can incorporate all kinds of evidence to get as close to what we call willing seller/willing buyer as possible.”
By coincidence, the CRB last week announced the biggest hike to streaming royalties in its history, defining a 45% rise over the next five years. Experts across the industry believe those increases, combined with growth in paid streaming subscriptions and the probable fruits of the new law, offer the most encouraging outlook for music in years.
Nashville’s best-known copyright reform advocate Bart Herbison, president of the Nashville Songwriters Association International, told WMOT late last year that he was involved with the delicate negotiations that led to a bipartisan and industry consensus plan.
“It solves a lot of problems,” Herbison said. “For the digital services, they know where to find a license. And they don’t get sued as long as they pay (for) the song while they’re looking for the owners. Imagine the songwriters and publishers governing that, because if we don’t someday Google of the government will. And that’s the last thing we want. And imagine this just simplifying everything out there in an ecosystem that’s awfully complicated.”
Here’s a plain-English summary of the MMA from Rep. Ted Lieu’s office.