At a ceremony in the Oval Office on Thursday, President Trump signed the Music Modernization Act into law. The Act represents a major reform of Section 115 of the U.S. Copyright Act. It received bipartisan support in Congress and has been widely praised by major record labels, streaming services, consumer groups and artists. Three provisions in particular are likely to have major impacts on the recording industry.
First, the Act streamlines the process for paying royalties on streamed music by creating a non-profit organization called the Mechanical Licensing Collective. The MLC will maintain a large music copyright database and offer blanket licenses, enabling streaming services to obtain the rights to an entire registry of music at once. This organization will replace the patchwork system currently in place, which requires streaming services to send a “Notice of Intention” to the U.S. Copyright Office each time it is unable to locate a composition’s rights holder—often resulting in the royalties going unpaid. The reform is expected to benefit streaming services by simplifying how they obtain licenses, ensure that songwriters are properly paid for their compositions, and unburden the Copyright Office of the NOI process. Consumers will benefit because MLC will likely encourage new competitors to enter the streaming marketplace.
A second provision of the MMA, called the Allocation for Music Producers Act, establishes a new procedure for music producers to obtain royalties when their songs are played. Producers will now receive their royalties directly from SoundExchange, a rights management organization designated by Congress, rather than relying on the artists with whom they created the music. While SoundExchange is already widely used on a voluntary basis, the AMP Act marks the first time producers’ rights to receive these royalties has been formally codified.
Finally, the MMA includes a long-awaited provision called the CLASSICS Act, which closes a loophole by extending federal protections to copyright holders of pre-1972 music. These rights holders were never grandfathered into the current copyright regime following the passage of the Sound Recordings Act of 1971.
On hand to witness the signing were Recording Academy president Neil Portnow and a bevy of musicians including Kid Rock, the Beach Boys’ Mike Love, and Craig Morgan. The Act will come into full effect on January 1, 2020.
Alex Van Dyke is an Entertainment Highlight Contributor for the Harvard Journal of Sports and Entertainment Law and a current first year student at Harvard Law School (Class of 2021).
