Wide-ranging Music Modernization Act signed into law
President Donald Trump has signed the bipartisan Music Modernization Act into law, reforming how songwriters and performers are reimbursed for their work in an age of increasing media streaming versus physical media ownership.
The Music Modernization Act aims to perform a number of functions to update existing music licensing laws. Specifically it combines the CLASSICS Act that applies to works written or recorded before 1972, the Fair Play Fair Pay Act, Musical Works Modernization Act for songwriters and publishers, and MP Act for producers and engineers.
The bill creates a blanket mechanical license and a collective for its administration, as well as changing how courts can determine rates of pay. The bill also ensures performance rate hearings between rights organizations BMI and ASCAP, as well as licensees, rotate across all U.S. Southern District Court of New York Judges, rather than the current system where cases are assigned to just two judges.
"The Music Modernization Act is now the law of the land, and thousands of songwriters and artists are better for it," said RIAA President Mitch Glazier. "The result is a music market better founded on fair competition and fair pay. The enactment of this law demonstrates what music creators and digital services can do when we work together collaboratively to advance a mutually beneficial agenda."
Prior to hitting the president's desk, the legislation went through a fast-track process for approval. At the end of the process, 82 senators signed on as co-sponsors of the bill, while the remaining 18 senators stayed silent while approving it.
One major change that did occur during its time in the Senate is that the bill itself has been renamed the Orrin G. Hatch Music Modernization Act, honoring Utah's Republican senator who helped introduce the bill, and will be retiring this year at the end of his term.
The act also eliminates part of the Digital Millennium Copyright Act of 1998 that establishes additional considerations for "pre-existing digital services" that are not provided to other digital services when rates are set, such as music streaming services like Apple Music. There is also the establishment of royalties for labels, artists, and musicians to be paid by digital services for any master recordings produced prior to February 15, 1972.
To Apple Music and its streaming competitors, the bill also adds in protections, in that the services cannot be sued for damages over royalties, so long as they comply with the law and create a database of authors and composers for all hosted music. This would help eliminate the practice of reimbursement suits against some streaming services, which have occurred in the past.
For example, Pandora settled a 2015 royalties lawsuit from major record labels over pre-1972 recordings for $90 million. Another early 2017 lawsuit demanded $1.6 billion from Spotify for claims of copyright infringement for tens of thousands of songs.
For the music industry, the bill stands to improve payments to songwriters and artists, who have previously complained about the extremely low rates they are being paid. While the bill won't change the value paid per stream by any large amount, the mechanisms it seeks to put in place aims to ensure payments do get paid.
"Songwriters have suffered long enough and this bill will allow them to be paid fairly by the streaming companies that rely on their work," said NMPA chairman Irwin Robinson, calling the passage "the most exciting development I've seen in my career."
SoundExchange president and CEO Michael Huppe said in a statement "The future of the music industry got brighter today. Creators of music moved one step closer to getting paid more fairly."
None of the streaming services, including Apple. had anything substantive in the way of complaints or opposition.
The Music Modernization Act aims to perform a number of functions to update existing music licensing laws. Specifically it combines the CLASSICS Act that applies to works written or recorded before 1972, the Fair Play Fair Pay Act, Musical Works Modernization Act for songwriters and publishers, and MP Act for producers and engineers.
The bill creates a blanket mechanical license and a collective for its administration, as well as changing how courts can determine rates of pay. The bill also ensures performance rate hearings between rights organizations BMI and ASCAP, as well as licensees, rotate across all U.S. Southern District Court of New York Judges, rather than the current system where cases are assigned to just two judges.
"The Music Modernization Act is now the law of the land, and thousands of songwriters and artists are better for it," said RIAA President Mitch Glazier. "The result is a music market better founded on fair competition and fair pay. The enactment of this law demonstrates what music creators and digital services can do when we work together collaboratively to advance a mutually beneficial agenda."
Prior to hitting the president's desk, the legislation went through a fast-track process for approval. At the end of the process, 82 senators signed on as co-sponsors of the bill, while the remaining 18 senators stayed silent while approving it.
One major change that did occur during its time in the Senate is that the bill itself has been renamed the Orrin G. Hatch Music Modernization Act, honoring Utah's Republican senator who helped introduce the bill, and will be retiring this year at the end of his term.
The act also eliminates part of the Digital Millennium Copyright Act of 1998 that establishes additional considerations for "pre-existing digital services" that are not provided to other digital services when rates are set, such as music streaming services like Apple Music. There is also the establishment of royalties for labels, artists, and musicians to be paid by digital services for any master recordings produced prior to February 15, 1972.
To Apple Music and its streaming competitors, the bill also adds in protections, in that the services cannot be sued for damages over royalties, so long as they comply with the law and create a database of authors and composers for all hosted music. This would help eliminate the practice of reimbursement suits against some streaming services, which have occurred in the past.
For example, Pandora settled a 2015 royalties lawsuit from major record labels over pre-1972 recordings for $90 million. Another early 2017 lawsuit demanded $1.6 billion from Spotify for claims of copyright infringement for tens of thousands of songs.
For the music industry, the bill stands to improve payments to songwriters and artists, who have previously complained about the extremely low rates they are being paid. While the bill won't change the value paid per stream by any large amount, the mechanisms it seeks to put in place aims to ensure payments do get paid.
"Songwriters have suffered long enough and this bill will allow them to be paid fairly by the streaming companies that rely on their work," said NMPA chairman Irwin Robinson, calling the passage "the most exciting development I've seen in my career."
SoundExchange president and CEO Michael Huppe said in a statement "The future of the music industry got brighter today. Creators of music moved one step closer to getting paid more fairly."
None of the streaming services, including Apple. had anything substantive in the way of complaints or opposition.
Comments
I'm all for "metered" listening. Why should I have to pay $9.99 per month for Apple Music when I might listen to tens of songs at the most? I'm helping pay for another listener who streams Apple Music 24/7 and listens to thousands of songs per month.
(I’m just checking on that double standard you seem to have set for yourself.
For reference: https://forums.appleinsider.com/discussion/205146#first-reply
)
Regarding unlimited anything: That's the case for the buffet, for wireless, Netflix, Apple Music, or any "all you can *" service. It's up to the consumer to make the decision if the price, versus what they consume on a per-period basis, is worth it. In your case, you sound like a CD guy, and not an Apple Music one. My kids are absolutely not CD-oriented, and Apple Music makes way more sense for them.
Example: LPs were more expensive to produce, store, transport than CDs. Yet CDs were priced higher than LPs, because “consumers get higher sound quality and convenience (no flipping over of records, cleaning off dust, etc.)
So record companies increased profit margins, artists got the same. When distribution went to download, costs for warehousing, transportation, dealers, etc. disappeared, being replaced by comparatively modest costs for server space. Did prices drop? No! Did artists get paid more? No! So the “record” companies wanted even more profits, but when consumers feeling being ripped off started pirating songs, they were complaining, using the “poor starving artists” as reason why pirating music is evil, all the while they pushed for legislation that made tons of artists work ineligible for royalties, declaring it “work for hire”.
In other words: as much I’m for artists getting paid fairly I am against consumers getting shafted by corporate greed under false pretenses. If this law doesn’t do anything to actually help artists and curb corporate greed, it’s pretty much useless.
Those of you worrying/complaining/jumping to conclusions about the bill, maybe go read it? Or find a detailed independent summary to answer your questions/concerns like the rest of us do?
Since I have read it, and as this article notes, the biggest changes here are more on the enforcement and record-keeping end of things, much less on the money (and no, the government is not setting rates, Lkrupp, nor was a judge involved at any point — again, read the actual bill before making unsubstantiated claims).
Streaming still pays lousy, but now the artist will actually get paid (see also the Spotify lawsuit, again mentioned and linked in the article above) and won’t have to sue to demand accounting. That’s a good thing.
For those who are concerned that this law will raise rates, I can only say I really don’t think it will, at least not in the short term. Services like Apple Music/Spotify will have a pay out a bit more on pre-1972 recordings, but streaming is still thousanths of a cent per stream, so I’d be surprise if Apple raised rates anytime in the foreseeable. Most songs on the iTunes Store are still $1 (except for the ones where the record company demanded premium rates), and that rate has remained unchanged since ... what was it, 2003? That’s 15 years with only one (partial) price increase on sold tunes, I would expect Apple will keep it at $10 for as long as possible. Again, read the bill or a good summary thereof.
The point of Apple Music is to take advantage of it. I don't wanna pay more for enjoying it too much.
The record labels are making far less money than they were during the heyday of physical music, which is why there are only three major record companies left: Sony, Universal and Warner.
In 1948, when the LP was introduced, the first LP sold for $4.85, which is over $50 in 2018 dollars.
In the 1960's, 45 RPM singles listed for $1 (albeit for a 2-sided single) and generally sold for 64 to 66 cents. 65 cents in 1963 is $5.36 in current dollars. For ONE SONG (okay, two songs, but no one wanted the b-side in most cases).
In December 1953, discounted LP's at Liberty Records in NYC were selling for $3.15. That's $29.55 in current dollars
In December 1965, on sale LP's at Sam Goody's that listed for $3.79, $4.79 and $5.79 were discounted to $2.17, $2.77 and $3.77. That's $17.23, $21.99 and $26.76 respectively in current dollars.
In December 1970, E. J. Korvettes was discounting $4.98 to $2.88 (Joe Cocker, Van Morrison), $5.98 to $3.38 (deja vu) and $6.98 to $3.88 (Abbey Road). That's $18.26, $21.43 and $24.60 in current dollars.
Today, most new CD's retail for $10 to $14 and they tend to have more tracks. Back catalog CD's are as little as $6 (not that anyone is buying CD's anymore). That's the cheapest physical music has ever been.
The record companies aren't the ones who are selling you downloads and streams, so their servers have little to do with it. Those are third parties like Apple, Pandora and Spotify who must license from the record labels. And while we don't know how Apple Music is doing because Apple doesn't break out the numbers, we do know that Pandora and Spotify are not profitable. (Pandora was just sold to Sirius/XM).
The North American recorded music market was $14.6 billion in 1999. That's over $22 billion in current dollars. In 2017, the industry did only $8.7 billion. It's on track to do about $9.2 billion this year, but in real terms, the industry is only 42% its peak size (and those revenue numbers are based upon list prices, so actual revenue to the industry is much smaller).
And in any case, performing artists, writers and producers deserve to get paid a decent amount of money. It used to be that successful artists made money from their recorded music and went on the road to support the album. Today, it's the opposite. Few are making anything from their recorded music, so their revenue comes from the road and the recorded music backs the tour. But only the most popular acts can make any money on the road.
As to whether artists will still get shafted under this new law, I have no idea. At least they'll get paid for pre-1972 recordings. Performing artists (and/or their labels) still won't get paid for U.S. over-the-air radio play. But it's hard to be convincing about corporate greed when music is the least expensive it's ever been (except for the limited edition, very expensive boxed sets sold to collectors, like the forthcoming Beatles White Album deluxe boxed set and others like it). Streaming now constitutes 77.1% of the North American business, downloads are 12.6% and physical units are 10.3% (all in dollars at list prices). Only 18.6 million CD's were sold in the first half of the year. At its peak in (full-year) 2000, it was 942.5 million. And lest you think that vinyl LP's are the savior of the industry, only 8.1 million were sold in the first half of the year, more than last year, but less than 2015. The full year will have fewer LP sales than what just two of the best selling albums of all time sold.
I typically listen to a radio station on Apple Music a few hours each month at most. It serves mostly to discover new music or remind me of a song I had forgotten about which often leads to multiple song purchases each month. I prefer to own a song rather than rent it.
If you're hunting songs you want to discover for the first time or be reminded of so you can buy, why on earth aren't you using the "For You" section as well as the radio stations? You're far more likely to discover songs and artists you find interesting by leveraging what Apple Music already knows you like. There's even a specific "new music" playlist, every week, aimed at introducing you to new artists/artists who aren't new but you're not as familiar with based on the kind of music you have already indicated you like through your purchases and existing library.