What's the big deal?
The laws that govern music are outdated; they're nearly 100-years-old. In the early 20th century, digital service providers (DSPs) such as Spotify, SoundCloud, Apple Music, and other music streaming technologies did not exist. Why are laws that are so archaic, outdated, and inadequate to the modern day music industry and its technologies still in effect?
The music industry is no longer a physical distribution industry; therefore, laws that were written and passed to govern physical distribution of music have been deprecated and shouldn't be governing digital service providers' platforms and their technologies.
The negligence to update these antiquated laws has caused incomparable headaches and barriers for songwriters that flourish in such a creative industry by greatly reducing their publishing royalties. For the music industry and those involved to continue to succeed, it's imperative that Congress pass the Music Modernization Act of 2017.
ASCAP, one of the three performing rights organizations in the United States, has launched a songwriter petition that urges Congress to pass the bipartisan bill. ASCAP states,
"This bill is the most significant update to music copyright law in over a generation and represents an unprecedented agreement between the music and technology industries."
Not all royalties are treated equal
There are two types of royalties: one for the sound recording (master) and then one for the publishing. The master recording is generally owned by the label and often has a clear path as to how the royalties are paid: pay the label its chunk and the label will distribute everyone's cut. The publisher side of the royalties (songwriters), however, isn't as cut and dry. The publisher royalties go to the songwriter(s) for the composition (melodies and rhythms within the track). The publishing royalties are collected by the performing rights organizations, which are ASCAP, BMI, and SESAC in the United States.
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The digital service providers' unclear side when it comes to publishing has caused a lackluster and unequal royalty rate for the songwriters. This has screwed songwriters over big time. If a track earns $100k on the master, the songwriter may or may not earn $10k from the publisher royalty, only 10% of what the master is earning. The Music Modernization Act of 2017 would revolutionize how songwriters and master recording owners are compensated for both the master and the publisher royalties.
What significance will this bill have to music copyright law?
By updating and improving the way that mechanical and performance royalties are calculated, the DSPs would know exactly who to pay (especially the publisher) royalties to. Currently, these DSPs often don't know who to pay due to lack of information; therefore, songwriters are losing out on potentially a lot of money from their music.
The Music Modernization Act of 2017 intends to disrupt the current lack of transparency and information by creating an entity that's funded by digital music companies. This entity would payout proper mechanical royalties for interactive streaming. Furthermore, songwriters' odds would increase for higher royalty rates in Copyright Royalty Board proceedings.
Lastly, this bipartisan effort would reform the inept "system that determines performance royalty rates for ASCAP and BMI by allowing rate courts to review evidence into the valuation of how songwriters are compensated as well as giving them improvements to the rate court process."
Who supports this bill, and how can I help?
The Music Modernization Act of 2017 is currently supported by the National Music Publishers’ Association (NMPA), the Nashville Songwriters Association International (NSAI), the Songwriters of North America (SONA), the American Society of Composers, Authors and Publishers (ASCAP), Broadcast Music Inc. (BMI), the Church Music Publishers’ Association (CMPA), the Production Music Association (PMA), MusicAnswers, the Music Publishers Association (MPA), the Council of Music Creators (CMC), the Society of Composers and Lyricists (SCL), and the Association of Independent Music Publishers (AIMP). The Digital Music Association (DiMA), which represents Amazon, Apple, Pandora, Spotify, and YouTube, also supports this bill.
The bill has a ways to go before it officially becomes law and, when passed, will be the most forward-moving achievement in the Digital Age for music creators and talents alike. Alongside Congress, ASCAP and songwriters are urging consumers to support the bill's journey into law by signing ASCAP's petition below.
Click HERE to sign ASCAP's petition to urge Congress to pass the Music Modernization Act of 2017 and treat songwriter and master recording owner royalties equally.