In the Pocket: Music, Movement, & Time ~ Volume 2

Music and time are a lot like numbers and money — they are nearly impossible to separate. Be it written, sung, heard, or played, having one or many notes, repeating or not, all music has a beginning and an end. And be it coins, notes, dollars, or yen, large or small, before “counting the cost”, you must first count the money. In other words, as complex as entertainment is, artistically and economically, its foundations are simple.

And in a time when copyright infringement is a global threat, these foundations hold entertainment together. Because of digital music streaming, in the past 2 years, a bill was introduced to the United States House of Representatives, to change laws for music licensing for the first time in 20 years. Signed into law in October of last year, the Music Modernization Act changed United States copyright law because of problems dealt with by rights holders from technology, such as, music streaming. As I have shared in the past, before the Music Modernization Act was passed, third parties who recorded or distributed copyrighted music did so by sending Notices of Intention to the United States Copyright Office, without knowledge of or permission from each songwriter.

Until then, the Copyright Office received nearly 50 million of these letters. Some of these letters were sent by digital service providers Apple Music and Spotify, to stream copyrighted music. But since this law was passed, instead of sending letters to receive licenses, digital service providers will now be given “modern” electronic licenses by a new governing agency. Ultimately, the Music Modernization Act historically changed copyright law, and did so in 3 ways:

1. The creation of a non-profit governing agency known as the “Mechanical Licensing Collective”, which will issue — legally give — electronic mechanical licenses to digital service providers, and collect and distribute mechanical royalties to rights holders. These mechanical licenses are blanket licenses, giving digital service providers the right to stream all music protected by the agreement for the license. The Mechanical Licensing Collective will also set new, blanket rates for mechanical royalties, for songs used by providers from an electronic database of musical works, created by the Collective, the providers, and music publishers. Since the database will have details of ownership for every song streamed, the collective will fix the problem of providers receiving permission from rights holders, with or without knowledge of who they are.
2. Mechanical royalties will be paid to songwriters for physical or digital copies of their songs, with rates used within an open market and set within agreements.
3. The court system used for royalty rates will no longer be used. For all court cases for royalty rates, the 2 largest American performing rights organizations — The American Society of Composers, Authors and Publishers, and Broadcast Music, Incorporated — only have one judge. In the future, a judge from the Southern District of New York will be randomly appointed to each case. This act will also repeal — legally reverse — Section 114(i) of the Copyright Act, which prevented judges from using rates for recording royalties, when setting rates for performance royalties.

Since royalties are paid quarterly, — every 3 months — songwriters can earn their royalties late. Through its new database, the Collective will help stop this problem by making their payments on time, which keeps them from becoming retroactive then black box royalties. According to the Copyright Office, retroactive and black box royalties can be kept by the Collective after the statutory holding period until they are paid to the correct rights owners. These same royalties can be distributed by the Collective no sooner than January of 2023, or kept longer to continue matching songs to their rights owners.

This new database will also limit the liability of service providers, keeping them from out of lawsuits for streaming music without permission from rights holders. Although licenses will not be issued until January of 2021, this past July, the board of the Collective was chosen by the Copyright Office. The selection of the board was due on July 9, but surprisingly made 4 days before, possibly showing the confidence of the Copyright Office in this new board. As published in a Final Rule from the Copyright Office, the board, known as Mechanical Licensing Collective, Incorporated, is made up of the most accomplished executives in entertainment today.

As stated in the Final Rule, this board was voted over a competing board known as the American Music Licensing Collective due to its planning and organization, which provided a reliable basis to conclude it will be able to meet the administrative obligations of the Collective. Led by the Nashville Songwriters Association International, National Music Publishers Association, and Songwriters of North America, the board will be in charge of collecting and distributing all royalties to rights holders. Also within its Final Rule is the selection of the “Digital Licensing Coordinator”, or the non-profit agency that will protect the activities of the digital service providers. It will also help the Mechanical Licensing Collective in paying royalties to the correct rights owners by matching musical compositions with their sound recordings.

The Digital Licensing Coordinator is made up of representatives for Amazon, Apple, Google, Pandora, and Spotify. And according to the Copyright Office, this group was the only group submitted to be voted as this agency, selected by the Register of the Copyrights, and approved by the Librarian of Congress. The Final Rule also cited comments filed by the Recording Academy? with the Copyright Office as reasons for why the board was chosen over the American Music Licensing Collective. Filed in April of this year, these comments asked for more information for matching data and contacting songwriters, to make sure all songwriters are paid fairly — ultimately, the purpose of the Music Modernization Act.

It took 20 years to pass this law, but it was worth waiting every year. Because passing it proved that by patiently refusing to give up, not only is unity possible but needed between musicians and digital services — to protect the rights and future of musicians everywhere.

All content in this news article is the intellectual property of original author, Seth D. Mills, and may not be distributed, publicly displayed, published, or reproduced without the expressed written consent of Seth D. Mills. The word mark “Recording Academy” is legally recognized by the United States Patent & Trademark Office as a registered trademark, owned by the National Academy of Recording Arts & Sciences, Incorporated, also known as the “Recording Academy?”. The content, rights, and copyright of this article belong to Seth D. Mills.

Copyright ? 2019 Seth D. Mills