What The Passage of the Music Modernization Act Will Mean To Music Creators

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EFFICIENT & TRANSPARENT LICENSING

  • A new non-profit centralized mechanical licensing coalition (MLC) will be formed that will administer, collect, distribute and audit mechanical royalties paid by digital service providers (DSPs) in connection with interactive digital streams on services like Spotify, Apple, Amazon, Pandora and Rhapsody.

  • The MLC board will consist of 14 seats: 4 major music publishers, 6 independent music publishers, and 4 self-published songwriters – who will have a say in the oversight of mechanical licensing for the first time ever.

  • The MLC will create and maintain a publicly accessible database of copyright information for all songs, match musical compositions with sound recordings, and track down missing copyright claimant information.

  • There will be a clear process for copyright owners to claim ownership of songs.

  • A “blanket” license will be created for DSPs to use multiple songs for interactive streaming and downloads.

  • No more NOIs!

BETTER MATCHED & INCREASED ROYALTIES

  • Royalty rates will be determined on a free market willing buyer/willing seller basis.

  • You will no longer be charged an administration fee for the distribution of your royalty, resulting in payment to you of 100% of the royalty due!

  • The MLC will hold unclaimed royalties for 3 years while it tracks down copyright claimant information. After 3 years the MLC will distribute the unclaimed royalties on a market-share basis.

  • Songwriters will be entitled to receive at least 50% of the unmatched royalty fund.

  • Songwriters will have an equal representation on the advisory committee overseeing unclaimed royalties.

TRANSPARENT ACCOUNTING & CONSEQUENCES

  • The MLC can audit the DSPs to ensure proper reporting and payment.

  • If the DSPs fail to meet their reporting and royalty payment requirements, the MLC can pursue them for infringement of rights with no limitation on their liability.

  • Copyright owners can audit the MLC with respect to their payments.

  • Songwriters will have equal representation on the dispute resolution committee overseeing and resolving disputes of copyright ownership and royalty distribution.

IMPROVED COURT PROCEEDINGS FOR PERFORMANCE ROYALTY RATES

  • Rate court judges will be randomly assigned and rotated through rate proceedings that ASCAP and BMI are subject to rather than the same assigned judge to each proceeding, helping to ensure a fairer outcome.

  • The judges will be able to consider other market rates, such as market rates paid for sound recordings, when considering and setting the ASCAP and BMI performance royalty rates for streaming.

PAYMENT OF ROYALTIES TO LEGACY ARTISTS

  • Sound recordings created prior to 1972 will receive royalties for digital and satellite exploitations.

  • 50% of the royalty will go to the owner of the sound recording, and 50% will go to the artist.

PAYMENT OF ROYALTIES TO PRODUCERS AND ENGINEERS

  • Studio professionals will be directly compensated by SoundExchange for the digital performance of recordings that the artists have agreed to give a portion of their royalties to.

  • Studio professionals will have a direct legal process for collecting these royalties.