‘Music Modernization Act’ Clears Senate Judiciary Committee


WASHINGTON, D.C. — Legislation that has both the support of the National Association of Broadcasters and the Recording Industry Association of America has moved one step closer to a floor vote by the U.S. Senate — and the likely passage of S. 2823, otherwise known as the “Music Modernization Act.”

The Senate Judiciary Committee has unanimously voted in favor of the Act.

Introduced May 10 by Utah Republican Sen. Orrin Hatch, the Act includes the original Music Modernization Act, the CLASSICS Act, the AMP Act, and a market-based rate standard for statutory licenses.

It mirrors legislation that was approved on April 11 in a 32-0 vote by the House Judiciary Committee.

The Music Modernization Act marks the most significant update to music copyright law for songwriters in a generation. The bill seeks to improve 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.

Meanwhile, the CLASSICS Act — now incorporated into the MMA — has been hailed as “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).

The package legislation also includes the AMP Act, which “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.”

Then, there is the market-Based rate standard for statutory licenses. This would require a market-based rate standard for sound recordings for statutory licenses.

The 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.

The vote, without one objection, from the Senate Judiciary Committee was met with glee from several key advocates.

“We are grateful that the Senate Judiciary Committee has taken the next vital step to advance the Music Modernization Act,” said RIAA President Mitch Glazier. “Music speaks to all parties, all people, in all places. And when a community comes together as we have done, with no segment getting everything they want but recognizing injustice and working toward a common goal, anything is possible. We welcome the momentum surrounding this bill and thank Senators Grassley, Feinstein, Hatch, Coons, Kennedy and all of the co-sponsors for leading the charge in the Senate to right a long-standing wrong with the CLASSICS Act. We look forward to Senate passage of the entire MMA, and this crucial bill finally becoming law.”

For Neil Portnow, President/CEO of The Recording Academy, there was gratification to see the industry and Congress work in harmony to pass the MMA through the Senate Judiciary Committee. “Following years of advocacy by music creators, we look forward to that momentum continuing as the Music Modernization Act heads to the Senate floor,” he said. “We thank the Committee for its swift movement of the bill. Through collaboration we can truly make a difference for the hundreds of thousands of working music creators across the country.”

Also giving praise was National Music Publishers Association President/CEO David Israelite. “Today’s vote is a huge step towards the Music Modernization Act becoming law,” he said. “We are pleased that the MMA as approved by the Committee builds upon the fundamental compromise between music creators and digital services that will greatly benefit songwriters. With the many important stakeholders involved, it is no small feat for the MMA to have made it this far, and once the MMA is signed into law, songwriters will see more of the money they deserve from streaming services who currently operate off of laws from 1909 and consent decrees from 1941.”

The MMA includes language that will formally establish a role for Congress as the Department of Justice reviews consent decrees with the two largest performing rights organizations — ASCAP and BMI — which collectively license over 90% of the musical works that are played on local radio and television stations.

“This balanced legislation provides much needed reforms to the music licensing market to the benefit of songwriters, legacy recording artists, producers, digital streaming services and music users,” said NAB President/CEO and former Oregon Senator Gordon Smith. “In particular, NAB applauds the inclusion of language that ensures enhanced congressional oversight of the DOJ’s announced review of the ASCAP and BMI consent decrees. The framework provided by these decrees is essential to a functioning music marketplace and they were comprehensively reviewed just two years ago with the DOJ concluding that their continued existence is squarely in the public interest. Any action to terminate these decrees must be preceded by Congressional action to ensure that songwriters, licensees, and consumers will not be harmed. NAB looks forward to working with all Senators as the Music Modernization Act moves forward and urges its swift passage.”

BMI President/CEO Mike O’Neill added,“Today’s vote is an important step towards achieving meaningful music licensing reform that will benefit America’s songwriters, composers and publishers.  The MMA, if enacted, will help ensure that music creators are compensated fairly for their work.  We applaud the unprecedented collaboration across our industry that helped move this bill forward and thank the full Senate Judiciary Committee, particularly Chairman Grassley, Ranking Member Feinstein, and longtime songwriter advocate Senator Hatch, for their leadership and support of this extremely important piece of legislation.”

— Additional reporting by Adam Jacobson, from Hollywood