House Leaders Introduce New Music Modernization Act

After several years of discussions and hearings, this week the House Judiciary Committee is slated to vote on a package of music licensing reforms introduced today (April 10) by Chairman Bob Goodlatte (R-Va.), Ranking Member Jerry Nadler (D-N.Y.), and Representatives Issa (R-Calif.), Hank Johnson (D-Ga.), Doug Collins (R-Ga.), Hakeem Jeffries (D-N.Y.), Lamar Smith (R-Texas), and Ted Deutch (D-Fla.) called the new “Music Modernization Act” (H.R. 5447). The new bill includes the original Music Modernization Act, the CLASSICS Act, the AMP Act, and a market-based rate standard for statutory licenses.

The House Judiciary Committee is expected to approve the bill tomorrow. The bill will then head to the House floor for a vote before the full chamber. A Senate hearing on the legislative package is likely to occur in May, with a markup in the Judiciary Committee soon after.

“The introduction of this new package bill, by the senior leadership of the House Judiciary Committee, is an unmistakable sign of more progress on several well-studied music licensing reforms, including the long-overdue CLASSICS Act,” said Cary Sherman, Chairman & CEO, RIAA. “It is a consensus bill widely supported by thousands of artists and songwriters, dozens of music organizations and leading technology companies. It is ready for a committee vote.

“There should be no debate that the greatest generation of music deserves to be paid when their recordings are played on digital radio. The time is now. These reforms have the potential to shape our industry’s future as they serve those in the music community who need them the most. We are grateful for the leadership of Chairman Goodlatte, along with Ranking Member Nadler, and Representatives Issa, Johnson, Collins, Jeffries, Smith and Deutch as they work to make these critical reforms a reality.”

“The Music Modernization Act (MMA) is the most significant update to music copyright law in a generation and represents unprecedented compromise among songwriter, music publisher, artist, record label, and digital music groups,” said NMPA CEO David Israelite. “The Music Modernization Act will help ensure a healthy digital music ecosystem, most importantly for the songwriters who create the music that makes such an ecosystem even possible.  It was not easy to achieve a consensus package, but we are grateful for music champions like Chairman Goodlatte and Ranking Member Nadler who have worked to foster agreement and we are eager for them to move this bill forward.  A special thanks to Congressman Doug Collins for being the driving force behind the MMA.”

“Today’s reintroduction of the Music Modernization Act signals we are one step closer to reforming our outdated music licensing system and providing songwriters a better future,” commented ASCAP CEO Elizabeth Matthews. “We thank Chairman Goodlatte, Ranking Member Nadler and Reps. Collins and Jeffries for their leadership and keeping America’s songwriters a priority.”

“Since first proposed four years ago at GRAMMYs on the Hill®, it has been a goal of the Academy and its members to pass a music omnibus, or ‘music bus,’ bill that helps our songwriter, performer, producer, and engineer members,” said President/CEO of the Recording Academy Neil Portnow. “With the introduction of the Music Modernization Act, this dream of bringing fairness to all creators is now close to reality.”

“The AIMP is pleased to see that the U.S. Congress is moving forward with the Music Modernization Act, which was introduced today by Rep. Bob Goodlatte (R-Va.),” said AIMP president Michael Eames, AIMP New York Exec. Director Alisa Coleman, and AIMP Nashville Exec. Director John Ozier in a joint statement. “For too long, songwriters and publishers have been forced to deal with an outdated music licensing system that doesn’t work in today’s online world. Now for the first time, the music and technology industry as well as lawmakers from both sides of the aisle have come together to address these issues and give rights-holders more control over the licensing and collection of their works. The Act solves a variety of issues that afflict all songwriters and publishers but will significantly help independent songwriters and independent publishers by adopting a more modern and realistic rate standard, establishing a central public database to ease royalty payments from digital services, removing evidence limitations placed on rights-holders arguing for more accurate royalty rates, allowing PROs to be heard by more than the same two judges, and once and for all establishing that digital services must pay for the use of pre-1972 recordings. Our thanks go out to Rep. Goodlatte and all the representatives who worked on and support this bill, as well as the National Music Publishers Association (NMPA) for spearheading the effort and all of our fellow industry trade groups who have helped push it forward. We strongly urge Congress to pass this measure.”

The Key Pieces of the New Music Modernization Act include:

The Music Modernization Act (H.R. 4706, S. 2334) is the most significant update to music copyright law for songwriters in a generation. The bill improves both how, and how much, songwriters are paid. The bill reforms Section 115 of the U.S. Copyright Act to create a single licensing entity that administers the mechanical reproduction rights for digital uses of musical compositions – like those used in interactive streaming models offered by Apple, Spotify, Amazon, Pandora, Google and others. It also repeals Section 114(i) and, consistent with most federal litigation, utilizes random assignment of judges to decide ASCAP and BMI rate-setting cases – two provisions that will enable fairer outcomes for songwriters and composers.

The CLASSICS Act (H.R. 3301, S. 2393) is overdue legislation that addresses one of copyright law’s most glaring loopholes: the lack of payment for the streaming of recordings made before 1972. Legacy artists who recorded music before 1972 are not entitled to be paid royalties under federal copyright law when their music is played on digital radio (think Pandora and SiriusXM). Many legacy artists are no longer able to tour in order to earn a living, so this unfortunate gap in the law has an enormous effect on their livelihoods. The CLASSICS Act would treat legacy artists the same way their contemporaries are treated. Notable: Pandora supports this bill, along with the Digital Media Association (DiMA), and the NAACP recently endorsed the legislation, among others.

The AMP Act (H.R. 881, S. 2625) improves and simplifies the payment of royalties owed to music producers, mixers and engineers by allowing royalty collection/distribution organization SoundExchange to directly pay these music creators. This formalized, streamlined process provides a consistent and permanent arrangement for studio professionals to receive their much- deserved payments for their contributions to the creation of music.

Market-Based Rate Standard For Statutory Licenses. The new bill would require a market-based rate standard for sound recordings for statutory licenses. This provision would allow the Copyright Royalty Board which sets rates for statutory services to consider the rates and terms that would have been negotiated in the marketplace between a willing buyer and a willing seller.