The Music Modernization Act: The Basics
November 14, 2018
On October 11, 2018, President Donald Trump signed the Music Modernization Act (MMA) into law (H.R. 1551). This new law, at over 60 pages, is one of the largest reforms to copyright law in decades. The MMA focuses on updating music copyright law to be more in tune (pun intended) with the modern digital world of music streaming and satellite radio.
Digital Platforms Prompt Change
Component parts of this legislation have been in the works for several years, but finally the music industry and the computer/internet/streaming/tech industry came together in support of this legislation, which tries to help establish a better framework to address music rights, royalty payments, licensing, and administrative functions in the digital world.
In the early 2000s, companies like Napster and iTunes changed how consumers accessed music with the advent of digital media. No longer was music obtained just by radio, music stores and public appearances—access to recorded music through digital means broadened and the old rules regarding how payments were made to artists were fast becoming difficult to apply.
The Anatomy of a Copyright
Every recorded song has two basic elements – a “mechanical” copyright for the music and lyrics (composition) and one for the actual recorded performance. The term mechanical license originates from the early 1900s, when the issue was how to pay royalties from the operation of mechanical “player” pianos that played music via perforated paper rolls. This term shows how old and outdated some of our music copyright concepts and laws actually are! The mechanical license morphed into a statutory royalty rate for the music and lyrics that had multiple identification and payment issues. The performance licenses were also varied and were inconsistently applied. The old rules did not fit well into the new digital world of streaming music and modernization of the way artists could be compensated was needed.
The MMA now attempts to modify the licensing and royalty issues involving recorded music to fit more neatly into this digital world. And while there are many details remaining to be worked out, and regulations to be drafted, the MMA is supposed to be fully implemented by January 1, 2020.
The MMA has three basic components:
- the MMA creates the Music Licensing Collective, an organization that will be responsible for collecting and distributing royalty payments.
- the MMA will ensure that royalties are paid on songs recorded prior to 1972, which currently aren’t subject to certain performance royalty requirements.
- the MMA will compel streaming services, such as Spotify, Pandora and Apple iTunes to work with publishers to streamline the licensing process and pay royalties to producers and engineers.
In my next post, we’ll take a deeper dive into some of the major components of this landmark copyright legislation.