MMA Marches On

A few months back, I blogged about the Music Modernization Act. Just to sum it up briefly, the Music Modernization Act is an attempt at reconciling former copyright laws as they relate to music licensing and technology. The main purposes of the Act are to:

1. Guarantee protection and thereby compensation for artists who recorded music prior to February 15, 1972;

2. Codify Sound Exchange policy recognizing and honoring “Letters of Direction” from artists who wish to share their royalties with other contributors;

3. Create a process whereby eligible contributors to sound recordings that were made prior to the enactment of the Digital Performance Right in Sound Recordings Act, are able to share in the royalties for the sound recordings;

4. Establish a standard rate based off of a willing buyer and willing seller standard which would require all digital music platforms to pay the fair market value for music;

5. Repeal legislation allowing courts to use the public performance royalty rate in considering sound recording rates; and,

6. Reform section 115 (mechanical licenses) to eliminate the Notice of Intent process, develop a mechanical licensing collective (MLC) to be funded by the digital service providers, and create a database easily accessible to the public which contains song ownership information. The collective will also allow for the licensing of musical works to streaming services who don’t have direct links to publishers.

As of late, SESAC and Harry Fox Agency (HFA) owner – a private equity firm - Blackstone, almost prevented the legislation from moving forward because it wanted to make some amendments to the act, which would make the allies who were backing the MMA separate, thereby making the entire project fall apart. HFA is an organization that collects mechanical royalties on behalf of its songwriters and administers mechanical rights. As the authority in the US music industry for mechanical rights administration, HFA felt that the creation of the MLC would negatively impact its business. After much negotiation and compromising on both parts, SESAC, HFA and NSAI (Nashville Songwriters Association International), Songwriters of North America (SONA), the National Music Publishers Association, and Association of Independent Music Publishers are all on board and are backing the draft of the MMA as amended. The parties were able to compromise by modifying the MLC’s administration of the voluntary licenses outside the scope of the compulsory licenses, which will ensure that private companies, such as HFA won’t be eliminated from the marketplace, all while maintaining a healthy competition that benefits the songwriters and producers.

So far, I’m kind of digging this Act. I wish there were more noise from the actual songwriters and creators as opposed to these organizations that supposedly represent them, because as you can see from this HFA fiasco, their interests are not exactly one in the same. I’m excited to be in the thick of substantive changes in the copyright law and even more excited and anxious to see if and how these changes will benefit my clients.

Stay tuned…

Lerae Funderburg, Esq. is the Managing Attorney at Funderburg Law, LLC, an Atlanta based entertainment law firm. Lerae has almost 10 years of experience in entertainment law in both music law and film law. As an entertainment lawyer and blogger, Lerae keeps her viewers and subscribers up to date with entertainment law news, especially in the areas of music, copyright law and trademark law. If you are local to Atlanta, call and set up a consultation! She would love to hear from you!