Congress Sings From Same Digital Compensation Songbook

The House has made it unanimous, passing the Music Modernization Act without a naysayer among them, following the Senate's passage of the bill unanimously last week.

It now goes to the President's desk for his signature.

The bill creates a framework for better compensation of artists for digital plays of their music and makes it easier for music rights organizations to collect those fees from distributors of streamed music as they do from traditional plays on TV and radio.

Related: Federal Appeals Court Upholds Fractional Licensing

The House had already passed a version of the bill back in April, but had to revote it because of changes in the Senate version.

The legislation has been billed as the most significant change in music licensing laws in decades and has drawn praise from a chorus of stakeholders.

"The bill will result in the most significant improvement of music copyright law in more than a generation, making it easier for creators across the music industry to earn a fair living through their creativity," said Copyright Alliance CEO Keith Kupferschmid.

It incorporates a trio of bills. The base Modernization Act creates a single licensing entity for reproduction rights for digital uses, like those of Spotify, Pandora, Google, Apple and Amazon. It also randomly assigns judges to preside over ASCAP and BMI rate-setting cases, according to the Recording Industry Association of America (RIAA).

The package also includes The CLASSICS (Compensating Legacy Artists for their Songs, Service, and Important Contributions to Society) Act, which compensates artists for pre-1972 recordings that had previously not been eligible for digital royalties.

Then there was the AMP (Allocation for Music Producer) Act, which allows for direct payment of royalties to music producers and engineers.

"This critical legislation will benefit songwriters, legacy recording artists, producers, digital streaming services, and music listeners," said National Association of Broadcasters president Gordon Smith. "The MMA is the culmination of a years-long process to find consensus solutions to music licensing problems...."

"We are particularly supportive of a provision in this legislation that ensures an enhanced congressional review of any DOJ changes to the ASCAP and BMI consent decrees. These decrees are essential to a functioning music marketplace, and any action to terminate them will now be preceded by appropriate Congressional oversight to protect the interests of songwriters, licensees, and consumers of music."

“Much has changed in the music industry in the digital age, with online streaming driving increased revenues for creators and copyright owners alike," said Digital Music Association CEO Chris Harrison. "A modern industry requires a modern solution. The MMA finally brings our music licensing laws into the 21st century and ensures greater transparency and efficiency for the entire music ecosystem."

"Creators opened my eyes to the inequities in American copyright law during my first year in Washington,": said Rep. Doug Collins (R-Ga.), one of the legislators who introduced the original version of the bill. "Since then, I have been listening to and working with creators across the nation to make our laws work in the 21st century for the entire music ecosystem. The Music Modernization Act began with a commitment to fairness and found champions in both houses and across the aisle... It has been an honor to work alongside songwriters, publishers, digital streamers, broadcasters, artists and fellow lawmakers to make the music licensing landscape fairer and freer for everyone who’s ever loved a song."

“We’re pleased to see this updated bill pass the House," said Public Knowledge policy counsel Meredith Rose. 

"While the copyright terms in the revised bill aren’t perfect, they are vastly improved from the House’s original version, and avoid locking away pre-1972 sound recordings for many more decades than necessary. Furthermore, the bill now guarantees that old sound recordings will clearly and fully enter the public domain after the expiration of this new federal right.

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.