House Passes Historic Digital Music Licensing Package

The House has unanimously passed the Music Modernization Act, a compromise bill that creates a framework for better compensating artists for digital plays of their music and making it easier for music rights organizations to collect those fees from distributors of streamed music like Pandora and Spotify, as they do from traditional plays on TV and radio.

The bill has been billed as the most significant change in music licensing laws in decades, and drew praise from a chorus of stakeholders. It now heads to the Senate, where it is also expected to pass.

It actually 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, which 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.

“NAB applauds the House passage of the Music Modernization Act, which provides a consensus solution to music licensing issues facing songwriters, music publishers, and on-demand streaming services," said National Association of Broadcasters President Gordon Smith.... "We look forward to working with lawmakers in the Senate to advance this important legislation.”

“With this unanimous vote, we are one step closer to a once-in-a-generation reform of our music licensing laws," said RIAA in a statement. "It’s a long time coming and we have much work to do, but the breadth and depth of unprecedented legislative support demonstrated over the last two weeks is illustrative. It is the result of a broken system that poorly serves creators and years of painstaking consensus-building by a many key members of Congress. This bill has advanced as far it has because its component parts reflect reforms of the entire music ecosystem. That is an essential ingredient."

Related: Bipartisan Bill Seeks Royalties for Pre-1972 Music

“This is an historic day for music creators," said MusicFIRST Executive Director Chris Israel. "An overwhelming majority of Republicans and Democrats voted to bring U.S. music licensing into the 21st century and deliver justice for legacy music creators."

“Today’s passage of the Music Modernization Act by such a significant margin underscores the widespread consensus that our music licensing system needs immediate updating," said ASCAP CEO Elizabeth Matthews. "After years of advocating for reform, we are thrilled that our country’s leaders are now paving the way for a brighter future for music creators who have struggled under outdated laws for far too long.

"[T]he Music Modernization Act will ensure fans and artists can take full advantage of streaming to create, discover and enjoy music and that we continue streaming forward into the future," said Chris Harrison, CEO of the Digital Media Association, which represents Amazon, Apple, Google, Microsoft, Napster, Pandora and Spotify. "As the Senate considers the MMA, we look forward to working with Senators Hatch (R-UT), Whitehouse (D-RI), Alexander (R-TN) and Coons (D-DE) to make sure it successfully passes the Senate and gets signed into law."

“The House passage of the Music Modernization Act is truly historic for songwriters and the entire music ecosystem which they fuel,” said David Israelite, president of the National Music Publishers Association. “The MMA improves how songwriters are paid and how their work is valued, both of which are long overdue. The bill also helps digital streaming companies by giving them access to all the music their consumers want to enjoy.”

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.