Beyond Live: Music Modernization Bill Hits Capitol Hill, But Can It Pass?

Inhauscreative – U.S. Capitol Hill

This week, U.S. Senators Orrin Hatch (R-UT), Lamar Alexander (R-TN) and Sheldon Whitehouse (D-RI) introduced the Music Modernization Act to the Senate, a sweeping attempt that would leave a huge impression on the record and music publishing businesses. The Senate bill mirrors the House bill introduced in December by Congressmen Doug Collins (R-GA) and Hakeem Jeffries (D-NY). The bill’s goals are subtle on the surface but any one of the handful of changes will have significant and longstanding changes to how and how much creators and rights owners are paid royalties.

When Rep. Bob Goodlatte (D-VA) became chair of the power House Judiciary Committee in 2012, people throughout the music industry had high hopes for an update of decades-old copyright laws that have shaped today’s music business. Goodlatte, a long-time friend to record labels and music publishers, would six get six years, the maximum allowed for heads of House committees, to make a lasting impact. Five years into Goodlatte’s term, however, proposed legislation has died on the vine and opposing parties have failed to reach an agreement outside of Congress’s intervention.

So, with a year left in Goodlatte’s term, Congress is backing a flurry of music industry-related legislation. The latest bill is the Senate version of the Music Modernization Act, introduced Wednesday, that mirrors the House version introduced in December. The bill’s co-sponsors are familiar names to music industry watchers: Orrin Hatch (R-UT), a 21-year Senate member (and actual songwriter) who’s retiring at the end of the year, Lamar Alexander (R-TN) and Sheldon Whitehouse (D-RI)

When the House bill was introduced last month, a flotilla of songwriters and trade groups representing creators and rights owners, performing rights organizations, and the Digital Media Association voiced their support. Rep. Doug Collins claimed “the status quo isn’t serving industry stakeholders” in an op-ed at The Hill. Songwriters in particular have called for changes during Goodlatte’s term. The bill addresses publishing royalties by overhauling the ways digital services obtain licenses to make digital reproductions of interactive streams or digital downloads of musical works. 

Unsurprisingly, the bill also has a formidable detractor, the National Association of Broadcasters, the broadcast radio’s lobby. The NAB opposes the bill because it could increase royalty costs for radio and television broadcasters. If passed, the bill would change how broadcasters settle disputes with ASCAP and BMI. Rather than the current model of assigned judges for each PRO, a dispute would be handled by one of many judges in the Southern District of New York. As explained in the House’s overview of the bill, “facts afresh for each rate case…without impressions derived from prior cases.”

A laundry list of past music industry-backed legislation has failed to make it to the president’s desk. A Songwriters Equity Act, introduced in both 2014 and 2015 was an attempt for higher mechanical royalty rates for reproductions of musical works—the download of a song on a music streaming service, for example. The Fair Play, Fair Pay Act of sought to require AM/FM stations to pay a performance royalty for the performance of sound recordings—songwriters have long enjoyed this performance right. The Allocation for Music Producers Act would have created a system for a recording artist to allocate a portion of performance royalties to a recording’s producer, mixer, or sound engineer. A broader attack on piracy, the Stop Online Piracy Act of 2011, failed miserably after intense pressure by technology companies and some human rights groups.