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Music Modernization Act to Be Introduced Tuesday

Licensing reform for the 21st century music industry is expected to take a step forward Tuesday with the introduction of a new Music Modernization Act that combines key provisions of what were four separate legislative initiatives into a single bill that will update how music rates are set and how songwriters and artists are paid.

A key provision of the bill is for Congress to establish the equivalent of a SoundExchange for songwriters to track credits and distribute royalties when digital services use their work. The switch to a market-based rate standard for artists and writers, closing the pre-1972 loophole that denied digital compensation to legacy artists and the addition of copyright royalties for producers and engineers are other changes widely hailed as improvements by a wide range of industry organizations, from the Recording Academy and the RIAA to ASCAP, BMI, the American Association of Independent Music and the American Federation of Musicians.

The move is spearheaded by House Judiciary Committee Chairman Bob Goodlatte (R-VA). “As part of the House Judiciary Committee’s copyright review we have worked with members and stakeholders to ensure that these laws are working in the digital age to reward creativity and protect the rights of authors, artists, and creators,” Goodlatte told Variety on the eve of the new bill’s introduction. “Technology continues to rapidly advance [and] we must ensure that our copyright system can keep pace.

Goodlatte has worked closely on the bipartisan effort with Judiciary Committee ranking democrat Jerrold Nadler of New York. The bill is expected to move out of the committee on Wednesday and on to the full House for a vote within the next couple of weeks. After passage by the House, which is widely expected, it is on to the Senate, which is expected to take up the issue next month. The Senate can either pass the House version or modify to its own specifications. If the bills differ, they will be reconciled before being sent to President Trump to sign into law.

The legislation appears to be on a fast track, with the Senate expected to introduce its version next month, paving the way for President Trump’s signature. Although the bill has bi-partisan support, the legislation’s provisions – which have advanced piecemeal in various bills over the past four years – have a free-market thrust popular with Republicans over the years, which means it is unlikely to meet with executive branch opposition.

Senate support is led by Chuck Grassley (R-IA), Chairman of the Senate Judiciary Committee, Lamar Alexander (R-TN) and Orrin Hatch (R-UT). Goodlatte had previously introduced the Compensating Legacy Artists for their Songs, Service, and Important Contributions to Society, or “CLASSICS” Act, from which the new bill draws.

The newly unified Music Modernization Act has been noticed by the House for markup on Wednesday. It combines proposals originally introduced in four separate bills: the Allocation for Music Producers (AMP) Act, the CLASSICS Act, the Fair Play Fair Pay Act, and a songwriter-specific version of the Music Modernization Act.

One important provision that is not included is the Fair Play Fair Pay provision that would require artists be paid for songs played on broadcast radio, heretofore considered “promotional.” That provision – strongly opposed by the National Association of Broadcasters and championed by the Recording Academy – will presumably be addressed separately.

Testifying at a Congressional field hearing in New York City during Grammy Week, Recording Academy president Neil Portnow referenced “productive discussions” with broadcasters about radio performance royalties for artists. Portnow harkened back to 2014, when he was one of the first in the music industry to call for an end to the factionalized squabbling that had triggered internecine battles, urging unification around combined legislation. Then, as now, Portnow emphasized how “the lack of a radio performance royalty in the U.S. discredits our commitment to intellectual property.” At the field hearing Portnow further emphasized that the U.S. is “the only nation in the developed world where radio can use an artist’s work without permission or compensation.” Songwriters are paid for radio play.

Goodlatte, too, harkened back to the January field hearing, calling it a flash point for bipartisan consensus. “I am pleased the Committee will be moving a consensus bill designed to significantly update several key provisions of U.S. copyright law regarding music licensing,” said the chairman, who had previously announced he would retire at the end of this term, making the Music Modernization Act a legacy effort that has galvanized his supporters on the hill.

“Much of the current licensing system was established in an analog song-by-song era using compulsory licenses first established in 1909,” he shared, demonstrating a depth of knowledge that only a small percentage of working members of the music community share. “In addition, artists who recorded works prior to 1972 do not receive any digital performance royalties under federal law, and current statute does not ensure that non-recording artists such as producers, sound engineers, and mixers receive revenue from webcasts of their work.”

Said NMPA President & CEO David Israelite: “The Music Modernization Act (MMA) is the most significant update to music copyright law in a generation and represents unprecedented compromise among songwriter, music publisher, artist, record label, and digital music groups. The Music Modernization Act will help ensure a healthy digital music ecosystem, most importantly for the songwriters who create the music that makes such an ecosystem even possible.  It was not easy to achieve a consensus package, but we are grateful for music champions like Chairman Goodlatte and Ranking Member Nadler who have worked to foster agreement and we are eager for them to move this bill forward.  A special thanks to Congressman Doug Collins for being the driving force behind the MMA.”

Added ASCAP CEO Elizabeth Matthews: “Today’s reintroduction of the Music Modernization Act signals we are one step closer to reforming our outdated music licensing system and providing songwriters a better future. We thank Chairman Goodlatte, Ranking Member Nadler and Reps. Collins and Jeffries for their leadership and keeping America’s songwriters a priority.”

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