By Goldman Antonetti & Córdova, LLC [Client Alert]
With new technologies developing within the music and audio-recording industries, the U.S. Congress recently passed a bill known as the Music Modernization Act (MMA). The purpose of the bill is to modernize copyright-related issues for music and audio recordings in light of new technology such as digital streaming. The MMA is a consolidation of three separate bills that address different issues in copyright law.
I. MMA: Amendments on Music Licensing and Royalties
The MMA intends to improve how music licensing and royalties are paid on streaming media services, like Spotify and Apple Music. The MMA provides for the creation of a non-profit government (NGO) agency that creates a database of owners of mechanical licenses (i.e., a compulsory license given by holders of a musical copyright to another party to cover, reproduce, or sample specific parts of the original work). The NGO agency would establish blanket royalty rates to be paid by these streaming services to songwriters and composers, allowing the streaming service to more easily identify the license holder.
This new system is designed to make sure that songwriters and composers are paid a portion of royalties for the reproduction of their work at contractually-established rates. The MMA has also revamped the federal court process whenever there is a royalty dispute or disagreement. The statute seeks to attain a wider pool of judges to allow faster dispute resolution.
II. CLASSICS Act: Protection for Older Works
The Compensating Legacy Artists for their Songs, Service, and Important Contributions to Society (CLASSICS) Act attempts to protect sound recordings made prior to February 15, 1972. Previously, under prevailing law, these recordings were not covered under federal copyright law. This void left works in this category under the protection of individual jurisdiction. Thus, it was up to state and Puerto Rico legislatures to enact laws for recording protection, which lacked uniformity and made it difficult for copyright enforcement and royalty payments across jurisdictional lines.
With the CLASSICS Act, sound recordings before 1972 will be covered by copyright until February 15, 2067. The Act also includes language that grandfathers older songs into the public domain at an earlier time. For instance, sound recordings made prior to 1923 will be entering the public domain on January 1, 2022, and recordings made between 1923 and 1956 will be entering the public domain over the next few decades.
III. AMP Act: Royalties for Others in the Creative Process
Recognizing the complexity of the creative process in the music business, the Allocation for Music Producers (AMP) Act will now allow parties like producers, mixers and sound engineers to also participate in the distribution of royalties over the use of sound recordings. This Act entrusts this duty to SoundExchange, the non-profit organization established by Congress to distribute royalties on sound recordings.