Trump Signs Music Modernization Act
November 1, 2018 — On October 11, 2018, Donald Trump, with Kid Rock at his side, signed the Orrin G. Hatch-Bob Goodlatte Music Modernization Act (“MMA” or “the Act”) in an effort to modernize copyright law in an era where digital streaming is king. Possibly most notably, the MMA creates a Mechanical Licensing Collective that is responsible for offering and administering blanket licenses to qualified personas and entities, collect and distribute royalties from digital music providers, and locate copyright holders whose works are used in other sound recordings among other functions. The Act is comprised of three bills concerned with royalties and licensing: 1) the CLASSICS Act, 2) the AMP Act, and 3) the Fair Play Fair Pay Act of 2017. Taking them in turn…
The CLASSICS Act
The CLASSICS Act (or Compensating Legacy Artists for the Songs, Service, and Important Contributions to Society Act) finally brings pre-1972 sound recordings into the federal copyright regime. By doing so, it ensures that artists who recorded music before February 15, 1972 will receive royalties and licensing fees when their songs or streamed or played on the radio. It also grants pre-1972 sound recording copyright holders the same exclusive rights (found in 17 U.S.C. § 106) and remedies (found in 17 U.S.C. §§ 502-505, 1203) as post-1972 sound recording copyright holders have enjoyed for years. As such, we have finally reached the long-awaited end to the confusing web of common law and state statutory rights governing pre-1972 sound recordings.
The AMP Act
The AMP Act (or Allocation for Music Producers Act) codifies the “Letter of Direction” practice, somewhat streamlining the ability for music producers, mixers, and sound engineers who took part in the creation of a sound recording to obtain royalties. AMP requires the Copyright Royalty Board to “reasonably implement a policy that provides . . . for acceptance of instructions from a [copyright holder] . . . to distribute to a producer, mixer, or sound engineer who was part of the creative process that created a sound recording.” Sec. 302(a)(5)(A), H.R. 1551-115 (2018). AMP also provides producers, mixers, or sound engineers (among others) to file for, and receive so long as the copyright holder does not object, royalties in the event that they are unable to obtain a Letter of Direction from the copyright holder. Codification of this longtime practice will help streamline the letter of direction process and provide oft-forgotten creatives behind the marquee artists a statutory means of securing royalties payments for their works.
The Fair Play Fair Pay Act of 2017
The Fair Play Fair Pay Act (“FPFP”) incorporates aspects of the CLASSICS Act and the AMP Act, while adding new wrinkles as well. In addition to requiring payment for pre-1972 sound recordings by closing a loophole exploited by digital streaming services and codifying the Letters of Direction practice, the FPFP creates a performance right for sound recordings on AM/FM radio and establishes a “willing buyer/willing seller” regime that ensures copyright holders receive fair market value for their recordings across all platforms and ensures songwriter royalties are undisturbed. The “willing buyer/willing seller” regime updates old law which required the Copyright Royalty Board to consider free-market conditions to determine fair rates. The
Conclusion
The Music Modernization Act is a much-needed revamp to an outdated copyright system.While it’s passing may not address all of the areas necessary to bring copyright law into the 21st century, bringing pre-1972 sound recordings into the federal regime, providing an updated royalties system that should provide fair pay to artists, and creating a clearer path for members of the creative process behind copyrighted works to obtain royalties is a step in the right direction.On the other hand, it will be interesting to see if the mechanical licensing regime leads to greater efficiency and whether the new scheme to distribute unclaimed royalties could lead to windfalls for the traditional licensing powers.
You can read the full text of the music modernization act here.
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