The Orrin G. Hatch Music Modernization Act is a combination of three bills: The Music Modernization Act of 2017, The CLASSICS Act, and the AMP Act. Together, these will completely overhaul – and modernize – the way songwriters and publishers receive royalties from streaming services that use their music. Let’s take a closer look at these.
The CLASSICS Act
The CLASSICS Act (Compensating Legacy Artists for their Songs, Service, & Important Contributions to Society Act) aims to establish a new royalty that will be paid to rights owners of songs created prior to 1972. Currently, there are no Federal protections for pre-1972 recordings. Instead, they are protected by State copyright laws, which makes it unclear just how much protection actually applies. The CLASSICS Act will make sure they are protected federally as well.
The Music Modernization Act of 2017
This is the meat of the bill, and will promote the most meaningful change of the three. Currently, streaming services struggle to pay royalties to the songwriters and publishers represented by their catalog because their responsibility is to pay them out individually. Because of this, they are under high risk of copyright infringement. Each infraction can cost $150,000 in fines. The Music Modernization Act will end this practice, and issue a blanket license so that the streaming services are no longer in danger of being sued for copyright infringement.
A new organization, the Mechanical Licensing Collective, will be established to collect and distribute mechanical royalties to songwriters and music publishers. To make this easier, the MLC will create a public database that will contain all the relevant information on songwriters. The streaming services will use this database to locate the rights holders, and will pay the royalties to the MLC, who will distribute them to the proper owners.
The MMA also overhauls Section 115 of the Copyright Act to force the courts to consider free-market conditions when determining royalty rates. Over time, this should lead to higher royalty payments to songwriters and music publishers.
Lastly, the MMA will now allow ASCAP and BMI to rotate between 3 different judges when asking for increases to performance royalties. This is also a win for songwriters, with potential to increase their payouts.
The AMP act will improve royalty payouts for engineers and producers when their recordings are used on satellite and online radio. This is a practice SoundExchange has been employing for a while, but this law will make it official for services to come. This is also important because it is the first time music producers have ever been mentioned in copyright law.
The Music Modernization Act will seriously bring our copyright laws into the 21st century, and make it much easier for rights holders to get paid when their music is played. Having these protections in place in the streaming era is a major step in the right direction.
The Music Modernization Act will go into effect 2 years after the bill is signed into law. And with Midterm Elections coming up, time is of the essence to make sure the bill doesn’t lose support. If you want to help, call your local congressman and tell them you’re in favor of the bill today!
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