The Music Modernization Act, signed into law on October 11, 2018, was designed to update U.S. copyright law to make sure artists and publishers were getting proper credit for their music running on streaming services. Publishing experts during the SXSW panel “The MMA Passed: Now What? Navigating the New Licensing Landscape” said the law comes at a time when databases of songwriters and publishers are not up to date, leaving the creators without credit and without pay owed to them. The law, they said, is the first step in solving that by streamlining licensing for digital music services.
“Notices of intent to license used to be sent to publishers in the thousands but jumped to the millions as steaming grew,” said panelist Danielle Aguirre, executive vice president and general counsel to the National Music Publishers’ Association. “As publishers and writers received more and more NOIs, we realized there was a problem and we needed to find a way to license properly and make sure publishers and songwriters are paid.”
The MMA is designed to streamline how licenses are processed, panelist Charmaine Smith said. By 2021, the U.S. Copyright Office will determine a singular mechanical licensing collective, or MLC, of publishers and songwriters who will come up with an updated database of those to whom royalties are owed. Copyright royalty judges will determine reasonable rates and terms, based on the music marketplace, for licensing music.
The MLC’s database creates a blanket licensing system for digital music providers to refer to. Whereas today an NOI is sent to an artist or publisher on a song-by-song basis, the music landscape as reshaped by the MMA creates this system through which streaming services can send a singular notice for the artist’s music—an NOI to obtain a compulsory license (not requiring permission from a copyright holder) will still be acceptable for non-digital uses. That difference is a welcome change, panelists said.
“If you put music on a service without sending an NOI to the right publisher, you run the risk of copyright infringement,” said Smith, who is a shareholder in Greenberg Traurig’s Atlanta office, where she focuses her practice on licensing for music, videos, and other entertainment related content.
Bob Bruderman, executive vice president of global digital partnerships at Kobalt Music, said part of the issue that made the MMA necessary was a standard practice of record labels pre-streaming services. In those days, he said, it was common to license music frequently after a piece of music was already used—voluntary licenses and other mechanisms gave “speed and arc of capabilities.”
“We were concerned with the speed of being able to license,” Bruderman said. “There was a cloud over the industry over liability. We didn’t want to see a handful of companies running the industry for a few years.”
The Copyright Office currently is seeking public comment on who should make up the MLC. Its requirements for the collective include: collective must be a nonprofit, not be owned by another entity, have substantial support from the music market, and meet tech requirements like administration of licensing under Section 115 (i.e. matching ownership, matching royalties, and figuring how to distribute royalties, including “unmatched” royalties, which involves payment for songs that do not have copyright holder information).
Additionally, the register of copyrights will designate a digital licensee coordinator to represent digital music services in administrating licenses and in determining an administrative assessment fee paid by providers for the reasonable costs of establishing and operating the MLC.