Senators Introduce “Most Significant Change in Music Licensing Laws in Decades” to Ensure Songwriters Are Paid Fair Value for Their Songs
Posted on January 24, 2018
WASHINGTON, January 24, 2018 – A bipartisan group of nine senators today introduced legislation they said would be the “most significant change in music licensing laws in decades” to ensure songwriters are paid fair value for their songs. The Music Modernization Act would set up a new simplified licensing entity to make it easier for digital music companies to obtain a license and play songs. The entity will also ensure songwriters are paid the royalties they are owed. The bill would also change the law to help songwriters be paid a fair market value for their songs.
The senators said the internet has transformed the music industry, and the Music Modernization Act updates outdated music licensing laws to make it easier for songwriters to be paid when their music is played online by a digital steaming service, or purchased online. According to Standard and Poor’s, there were 86 million paying subscribers to digital streaming services, who streamed music 252 billion times in 2016. Revenues generated from online music generated half the music industry’s revenues in 2016. As digital music streaming increases, the number of individual song downloads fell 24 percent between 2015 and 2016 and compact disc sales fell below 100 million units sold – which means less royalties paid to songwriters.
The senators—U.S. Senators Orrin Hatch (R-Utah), Sheldon Whitehouse (D-R.I.), Lamar Alexander (R-Tenn.), Dick Durbin (D-Ill.), Bob Corker (R-Tenn.), Chris Coons (D-Del.), Johnny Isakson (R-Ga.), Doug Jones (D-Ala.), and Kamala Harris (D-CA)—said the legislation represents a remarkable consensus among songwriters, music publishers and digital services.
“Songwriters will finally get a market-based mechanical rate standard, which should result in more equitable royalties from interactive streaming companies,” said Steve Bogard, president of the Nashville Songwriters Association International. “Until now, we have been tied to outdated rate standards Congress first adopted for player piano rolls back in 1909. In addition, American songwriters will, for the first time, by law, receive at least half of all unclaimed digital mechanical royalties. I want to extend my deepest thanks to all of our introducing Senate sponsors. The Music Modernization Act represents the most significant copyright reform in a generation.”
“I’m pleased to join my colleagues in sponsoring this crucially important legislation,” Hatch said. “Our music licensing laws are convoluted, out-of-date, and don’t reward songwriters fairly for their work. They’ve also failed to keep up with recent, rapid changes in how Americans purchase and listen to music. The Music Modernization Act will streamline and update our licensing laws to ensure that streaming services and other digital music providers are able to obtain the licenses they need while simultaneously making sure that songwriters are paid a fair market value for their work. This is a consensus piece of legislation that brings together all sides of the music industry, and I intend to work my hardest to see it enacted in the near future.”
“Rhode Island is home to talented musicians and a vibrant music scene. As more of us stream our music online, this bill will help make sure the songwriters who compose the music we love are paid fair value for their work. It will also help their music find a broader audience by streamlining the burdensome licensing process. Updating our licensing and royalties laws is a win for creators, publishers, and fans of great music,” said Senator Whitehouse.
“This legislation addresses two of the greatest challenges facing songwriters: One is that the arrival of the Internet has meant that many songwriters aren’t paid royalties when their songs are played, and two, when they are paid, they aren’t paid a fair market value for their songs,” Alexander said. “It is also the first major bill that has the support of music creators, publishers and digital music companies. With such broad support, I’m hopeful we will be able to pass the legislation this spring.”
“It’s no secret that music is enjoyed much differently today than when I was growing up. Records and record players now serve as decoration as opposed to the way to listen to your favorite Muddy Waters album in the comfort of your own home. But music licensing laws have not kept up in the age of streaming and downloading, and this has been a problem for music creators and consumers alike,” said Durbin. “The Music Modernization Act will reform outdated music licensing copyright laws that apply to internet music services, which will make the system simpler for them, provide fairer compensation for the song creators, and help consumers access their favorite songs for years to come.”
“Our state is blessed with a vibrant music industry composed of talented songwriters, skilled musicians, and countless small and large businesses,” said Corker. “However, while the industry has transformed with advances in technology and new platforms providing access to music, we have yet to modernize the way music creators are compensated for their work. This legislation will help improve the music marketplace so that it works not only for consumers but also the countless people who bring to life the music we enjoy each day.”
“The Music Modernization Act is an important bipartisan bill that will streamline music licensing for the digital age,” Coons said. “It is a much-needed update to the copyright laws that will help ensure songwriters are paid consistently when their songs are played online while giving digital music platforms an easier way to know that they have permission to play all the songs in their repertoire. This benefits everyone, including the public, as modernized copyright laws will provide the right incentives for artists to create new music today and for generations to come.”
“The music industry in Georgia is legendary, and among songwriters, musicians, producers and those with other careers in the music industry, our talent pool seems to be growing every day,” said Isakson. “The Music Modernization Act is broadly supported by performers as well as producers and distributors, and it would make a big difference in helping ensure that musicians and songwriters receive fair compensation for their work and that outdated music licensing laws are updated for modern technologies.”
“Alabama has a long and proud history of producing talented musicians – from Wilson Pickett to Jason Isbell,” said Senator Jones. “These artists bring so much value to our daily lives. In order for them to continue creating the music we listen to every day, we need to make sure they are adequately paid for their work. Today’s laws are outdated and fail to protect musicians in the digital age. I’m proud to co-sponsor commonsense, bipartisan legislation that will reward the artists who have brought all us so much joy.”
“Just because some of our greatest music comes from previous decades doesn’t mean our music licensing laws should,” said Senator Harris. “By modernizing how we compensate artists and distribute their music, this bipartisan legislation will benefit both the Californians who produce today’s hits and the innovative technology companies who bring that music to their fans.”
U.S. Representatives Doug Collins (R-Ga.) and Hakeem Jefferies (D-N.Y.) introduced companion legislation in the House of Representatives on December 21, 2017.
The Music Modernization Act:
- Adopts a simple licensing system for digital music services making it easier for companies to obtain a license to play a song and reducing the likelihood of litigation.
- Ensures songwriters will be paid the fair market value for their songs by:
o Directing the Copyright Royalty Board to set compensation according to the fair market value when songs are sold, such as through music downloads, replacing the current below-market standard.
o Removing a provision of law that narrows the scope of evidence the federal rate court may examine when asked to set songwriter compensation for when their song is played, such as in a restaurant or at a concert.
The legislation is supported by the National Music Publishers Association (NMPA), the Digital Media Association (DiMA), the American Society for Composers, Authors and Publishers, (ASCAP) the Broadcast Music, Inc. (BMI), the Nashville Songwriters Association International (NSAI) and the Songwriters of North America (SONA). Additional supporters include the Recording Industry Association of America (RIAA), the Recording Academy and the American Federation of Musicians.