Music Modernization Act: An Overview

By Monique Brown, 3L at University of Tennessee College of Law and Spring 2019 Semester-in-Residence Participant

The Copyright Act has finally entered the digital era! Musicians and other industry professionals have long been calling for a “musician-friendly” bill that would address and incorporate new technology and industry trends into copyright laws. Legislature finally responded to their requests with the Music Modernization Act of 2018 (“MMA”). After months of negotiation, revisions, and talk amongst songwriters, publishers, and producers, the bill was unanimously approved by the House and Senate and signed into law on October 11, 2018. The MMA addresses the main issues that have plagued the music industry for years by combining three previously introduced bills into one approved bill: the Classics and Protection and Access Act (“CLASSICS”); the Music Modernization Act; and the Allocation for Music Producers Act (“AMP”). Read below to learn more about the three main implications of the MMA.

Pre-1972 Sound Recordings:
Prior to 1972, sound recordings were not eligible for federal copyright protection; therefore, artists who recorded music were not fully protected under federal law. Though most states had their own copyright laws, individual state laws made it nearly impossible for songwriters to protect their music in multiple states, and songwriters were forced to seek protection in each state. Unfortunately, this often resulted in works being digitally streamed without compensation to the rights owner. In 1972, the Sound Recording Amendment was signed into law. This law made sound recordings eligible for copyright protection, and in turn, allowed royalty payments for streaming of sound recordings. Though this afforded federal protection to most sound recordings, the amendment was not retroactive, meaning it neglected artists who recorded music prior to 1972. This caused havoc amongst these artists, often referred to as “legacy artists.” Forty-six years later, the MMA fixes that issue by offering federal copyright protection to legacy artists.

New Governing Agency:
Lawsuits against digital streaming services, mainly Spotify, have flooded courtrooms for years for streaming services’ failure to pay royalties due to artists. The MMA creates a new governing agency, the Mechanical Licensing Collective (“MLC”), that will serve two purposes. First, it protects companies against infringement claims filed after January 1, 2018; this is a controversial aspect of the bill. How can the government use the enactment of a bill that was not signed into law until October 11, 2018 to prevent artists from bringing suits against companies that violated their rights prior to that date? Well, no one said the bill was perfect. Second, the MLC controls and issues blanket mechanical licenses to digital services such as Spotify, Apple Music, and Google Play. Essentially, the MMA shifts the responsibility for identifying rights holders from digital streaming services to the MLC.

Music Producers Rights:
Another important provision of the bill is the AMP Act. This Act is the first recognition of studio professionals by federal law in the United States. Under AMP, recording artists who want to allocate a percentage of their royalties to a producer must send a “Letter of Direction” to SoundExchange. SoundExchange will then distribute that percentage to the producer. For sound recordings fixed prior to November 1, 1995, SoundExchange will allocate 2% of royalties to be distributed to producers involved in the creation of a song, even if the letter was not sent.

Though the MMA does have some pitfalls, it gives federal protection to a whole class of artists. It will be interesting to see how this shift in the law will impact artists and their rights.

For more information on the MMA and what effects it is predicted to have in the music industry, be sure to attend our “Unpacking the Music Modernization Act” workshop on February 22, 2019, brought to you in partnership with the Artists’ Rights Alliance (formerly Content Creators Coalition).