Pre-72 Hits Pay Issue Now Threatens MMA

After a seemingly frictionless glide through the House of Representatives, the Music Modernization Act is struggling with continued turbulence in the Senate.

Just last week, backers of the bill mollified a protest by Blackstone Group, whose mechanical licensing group Harry Fox Agency would be all-but-destroyed by the MMA.  A resolution between the parties called for greater competition for the Mechanical Licensing Collective, which will be created by the MMA, as well as restrictions on the types of licenses the MLC can administer.

Now, there’s a brand-new attack, and it could be equally problematic, according to Digital Music News.  Sirius XM Radio and Music Choice are stepping up their efforts to derail the bill.  Sirius XM and Music Choice recently hired new lobbying firms in an attempt to combat the Music Modernization Act.

The CLASSICS Act has now been packaged into the broader MMA ‘mega-bill,’ though it continues to draw criticism.  Earlier, Sirius XM’s CEO, Jim Meyer, criticized the bill for expanding the royalty requirements for satellite radio without also expanding the requirements for terrestrial radio.

The CLASSICS Act would expand federal protections of sound recordings beyond 1972, which is a cut-off date that currently cuts out a lot of oldies recordings.  But traditional radio stations don’t pay for the broadcast of any sound recordings in the U.S. — for any year, post- or pre-1972.  And this bill does nothing to change that, or the obvious imbalance between the formats.

“During the same period that SiriusXM paid $2.2 billion for its use of post-72 works, terrestrial radio paid them nothing, Meyer protested earlier this year.  “If Congress truly wants to correct an unfairness in the Copyright Act, terrestrial radio should be subject to the CLASSICS Act just like satellite and internet radio.”

That raises a very prickly issue, with terrestrial radio staunchly opposed to paying any recording royalties.  Fair or not, the National Association of Broadcasters (NAB) is a powerful protector of the royalty-free arrangement, with considerable muscle to stop any legislation requiring terrestrial stations to pay.