Updated Music Modernization Act Introduced to Congress

An all-new Music Modernization Act (MMA) was unveiled in US Congress on April 10, 2018, featuring most - though not all - of the music-related legislative proposals circulating around Washington recently.  

Most significant among the MMA's provisions is a blanket mechanical license.  Streaming services, like Spotify, need to exploit both the performing right and the mechanical right elements of songs.  In most countries, there is a collecting society or collecting societies that can provide blanket licences covering both elements.  Those blanket licences are hugely valuable to streaming services, because they don't know who controls the rights in any one song, many of which have multiple owners.  

However, in the US, while blanket licences can be secured for performing rights via the collective licensing system, no such licence exists for mechanical rights.  US copyright law obliges rights owners to provide a mechanical rights licence at a set rate, but the service still needs to work out who to pay that set rate to.  Most services have been struggling with that task, leaving songwriters unpaid, and digital services sued over those missed payments.  The MMA will introduce both a collecting society and a blanket licence for mechanical rights in the US for the first time.  

Another provision of the MMA, which will be beneficial for music publishers and songwriters, reforms the way rates are set whenever song rights are licensed via a compulsory or collecting society license to better reflect market realities. 

The all-new MMA also incorporates elements of three other bits of music legislation that have been presented in Congress, including portions of the CLASSICS Act, which seeks to ensure recordings released before 1972 are paid royalties by online and satellite radio services. 

The other elements of the new MMA include provisions to benefit record producers and sound engineers, originally contained in the AMP Act, and a few lines applying the tweaks to how compulsory licence royalty rates are set to sound recordings as well as songs, something originally contained in the Fair Play Fair Pay Act.

What's missing - the core element of the aforementioned Fair Play Fair Pay Act - forcing AM/FM radio stations in the US to pay royalties to artists and labels, like radio stations do in much of the rest of the world - is not part of the all-new MMA.  Also, safe harbour reform isn't part of the overhaul.

For more information on the MMA, click here.