The Music Modernization Act Introduced In U-S Senate

A group of senators introduced legislation on Wednesday to streamline the music licensing process and to increase royalty payments to rights holders.

Sen. Orrin Hatch (R-Utah), Sen. Lamar Alexander (R-Tenn.), Sen. Sheldon Whitehouse (D-R.I.), and five others wrote a bill similar to one introduced in the House last month.

According to Variety, the Music Modernization Act updates music licensing laws to make it easier for songwriters to get paid when their music is streamed or purchased online. Songwriters have been seeking legislative changes for years, pointing out that they have not been receiving fair market value for their works on digital platforms like Spotify and Pandora.

Elizabeth Matthews

“Our music licensing laws are convoluted, out-of-date, and don’t reward songwriters fairly for their work,” said Hatch, who is a songwriter himself. “They’ve also failed to keep up with recent, rapid changes in how Americans purchase and listen to music.”

Alexander said the legislation is “the first major bill that has the support of music creators, publishers, and digital music companies. With such broad support, I’m hopeful we will be able to pass the legislation this spring.”

The changes in the bill include:

• In a new standard, mechanical royalty rates will be based on what a willing buyer and a willing seller would negotiate in a free market.
• A single entity will be created to grant blanket licenses for all musical works to digital media companies, and the entity will collect royalties for distribution to copyright holders. Digital music companies will pay the operation costs of the entity, but will also be shielded from liability for statutory damages. Digital music companies and copyright owners will still be able to enter their own voluntary license agreements.
• Rate courts will be able to consider sound recording performance royalty rates when determining musical work performance royalties for digital services.
• ASCAP and BMI are now subject to the same two judges presiding over the rate courts that decide songwriter compensation. Under the legislation, each new rate-setting case would be randomly assigned to a federal judge consistent with other federal litigation.

Elizabeth Matthews, the CEO of ASCAP, said the legislation makes changes “that better reflect the evolution of how people listen to music.”

In response to Wednesday's introduction by Senators Orrin Hatch (R-UT), Lamar Alexander (R-TN), Bob Corker (R-TN), Johnny Isakson (R-GA), Sheldon Whitehouse (D-RI), Kamala Harris (D-CA), Chris Coons (D-DE), Richard Durbin (D-IL), and Doug Jones (D-AL), of the Music Modernization Act, previously introduced in the House by Representatives Doug Collins (R-GA) and Hakeem Jeffries (D-NY), the following statement was issued by NAB President and CEO Gordon Smith:

“NAB commends the House and Senate cosponsors of the Music Modernization Act for finding a consensus solution to some of the core issues facing songwriters, music publishers, and on-demand streaming services. Compromise on music licensing has long proved elusive, and these lawmakers have carefully crafted legislation that benefits all of those parties. 

"Unfortunately, the current bill text includes unrelated provisions that will almost certainly result in unjustifiable cost increases for local radio and TV broadcasters and many other music licensees, for whom the rest of the legislation is largely irrelevant. NAB has been diligently working with the bill sponsors and other stakeholders to resolve those concerns, and we sincerely appreciate the shared commitment to finding a workable solution.”