Posted on January 26, 2018
In the latest sign that meaningful music copyright reform could be on the horizon, a Senate version of the Music Modernization Act is expected to be filed on Wednesday.
The Senate bill follows the House version filed in December.
Sen. Orrin Hatch, R-Utah, former chair of the powerful Senate Judiciary Committee, is the lead sponsor along with Sen. Dick Durbin, D-Illinois, who is also on the committee.
Sen. Lamar Alexander, R-Tennessee, a co-sponsor who has championed the proposal, called it a "consensus bill" since formerly feuding groups have banded together to support the legislation. Sen. Bob Corker, R-Tennessee, also signed on as a co-sponsor.
It's the music industry's version of bipartisan support: Songwriters and music publishers struck a deal with digital music companies to support the Music Modernization Act.
The legislation aims to improve digital royalty payouts to songwriters and publishers, while also greatly reducing the legal liability that streaming companies like Spotify and Apple Music have faced to properly license songs for use on their services.
Senator Tim Kaine and Senator Lamar Alexander played the 'Tennessee Waltz' on Capitol Hill. Video from Sen. Alexander's office
"This would be, if it becomes law, the most significant change in music licensing law in decades," Alexander said. "It's also important because it's a consensus bill. It has support of the songwriters, the publishers and the digital music companies like Spotify, Pandora, Amazon."
The legislation would create a new organization - some insiders have dubbed it SongExchange - that would handle digital mechanical licensing. The organization would be funded by streaming companies, but operated by publishers and songwriters.
Streaming companies would be able to obtain a blanket license from the new organization, which would then be in charge of identifying all of the correct copyright owners and paying them the digital mechanical royalties they are owed.
In exchange, the streaming companies would eliminate the legal liability that has come from expensive legal settlements with songwriters and publishers who said their songs were used by Spotify without proper licenses.
The digital royalty payouts to songwriters would theoretically increase too, because the judges who set those rates would factor in a song's fair market value. That means, for the first time ever, judges would consider the synchronization licensing fees songwriters are paid when their songs are used in a film or commercial.
Those fees tend to be higher than the government-set digital rate, so using them as evidence would presumably increase the digital payouts. Songwriters have been pushing for this provision for years.
Alexander is actually personally acquainted with music licensing because he co-wrote a song with country artist Lee Brice called "Falling Apart Together." He declared $101.75 in annual revenue on his most recent ethics disclosure form.
"(The bill) creates a new entity that will be managed by songwriters and music publishers and it will have two jobs," Alexander said. "One is if Pandora wants to play 'Falling Apart Together,' it comes to the entity and gets a blanket license. Then the entity finds me and pays us a royalty.
"So that avoids litigation and makes it easier for the digital music companies, and makes it more likely the songwriter gets paid when it's online."
But, there has been some opposition. The National Association of Broadcasters expressed concern that it could cost them money, and the Songwriters Guild of America told lawmakers that it opposes the proposed board composition for the new licensing organization.
The bill proposes the board be made up of eight publishers and two self-published songwriters. The SGA wants at least a 50-50 split.
Alexander said the SGA's complaints have made their way to him, but he pointed out the National Music Publishers Association, the Nashville Songwriters Association International and the Songwriters of North America are key supporters of the bill.
"My level of optimism is high," Alexander said, citing the bipartisan support for the bill. "We're going to talk with the judiciary committee soon and we'd like for the bill to become law in the first six months of this year."
Reach Nate Rau at 615-259-8094 and email@example.com. Follow him on Twitter