President Donald Trump signed the Music Modernization Act on Thursday, passing into law landmark copyright reform that Nashville songwriters have battled to pass for many years.
According to The Tennessean, Trump was joined at the ceremonial signing by the legislation's chief champions, including advocates representing songwriters, publishers, record labels and digital music companies, along with the lawmakers who shepherded the Music Modernization Act rather smoothly through a bitterly divided Congress.
But at the urging of Sen. Lamar Alexander, R-Tennessee, and U.S. Rep. Doug Collins, R-Georgia, the different interest groups came together to support the sweeping piece of legislation.
“The Music Modernization Act closes loopholes in our digital royalty laws to ensure that songwriters, artists, producers and providers receive fair payment for the licensing of music,” Trump said during the signing ceremony. "I’ve been reading about this for many years. Never thought I’d be involved in it, but I got involved in it. They were treated very unfairly. They’re not going to be treated unfairly anymore.”
The Music Modernization Act has three main tenets:
- It creates a new organization which will be in charge of the digital mechanical licensing of a song. The new organization, run by publishers and songwriters, will be in charge of identifying copyright owners and paying them their royalties for when songs are played on Spotify, Apple Music, Amazon or other streaming services. The onus for licensing had fallen to the streaming companies, and at times they failed to properly licensing songs, leading to multi-million-dollar lawsuits and class action settlements.
- The new law also creates a new standard for setting digital royalty rates for songwriters and publishers, implementing the more favorable free market value standard, which advocates say will increase digital royalty payouts to working songwriters.Importantly, the law also calls for a random rotation among federal judges in New York for who oversees copyright hearings so that the power to set rates isn't clustered with a single court.
- The legislation closes the loophole, which allowed digital radio companies to not pay artists and record labels royalties for songs recorded prior to 1972
How the new organization is formed, operated and which private companies emerge as partners will be of immense interest in the music industry.