Songwriters need bold reform that reflects the streaming era, not the player piano era.
Modernizing Mechanical Licensing
- For decades, outdated laws—dating back to 1909—have prevented songwriters from earning fair market value for their work. To make matters worse, the streaming era has further restricted a songwriter’s ability to earn a fair living.
- The Music Modernization Act (MMA) would establish a new mechanical licensing collective, paid for by the digital services and administered by songwriters and publishers, that will result in more timely payments of mechanical royalties to songwriters for their works used by streaming services.
- The MMA amends Sec. 115 of the Copyright Act to yield higher mechanical royalties for songwriters—applying the free market “willing buyer, willing seller” standard to mechanical licensing instead of a below-market rate formula.
- The MMA establishes a free and searchable database of musical works ownership to make copyright ownership more transparent and reduce the amount of unmatched works that have historically yielded no royalty payout to songwriters.
- For any remaining unmatched works, songwriters will be entitled, for the first time, to at least 50% of the unclaimed royalties and have audit rights to ensure that royalties are being paid and being paid accurately.
A Fair Process for Public Performances
- ASCAP and BMI, two of the performing rights organizations (PROs) relied upon by songwriters and composers to collect royalties for public performances, are restricted by consent decrees issued by the Department of Justice (DOJ) that date back to 1941. These outdated decrees have failed to keep pace with changes in technology and the music marketplace and constrain the PROs from securing fair compensation for their songwriters.
- While the Music Modernization Act does not reform the consent decrees, it does improve the rate court process for ASCAP and BMI so that they can secure fair market value for their songwriters. Rate courts will be able to consider all market evidence—including sound recording royalties—when setting the music composition rates for public performances. A rotating set of federal judges will also preside over the rate court for both ASCAP and BMI.
- The Department of Justice (DOJ) should consider reforming the consent decrees to provide a fairer system for songwriters and their ability to earn fair market compensation for their work. The Recording Academy submitted comments to this effect, requesting that the DOJ modify the consent decrees to benefit the songwriter community.