In this Newsletter:
Key Aspects of the Music Modernization Act, including:
DSP's (e.g. Spotify) can't get sued for prior infringement;
A new registration is required to get paid royalties from DSP's or you can lost your unclaimed royalties; and
What details are missing from the Act
WGE Spotlights Kelly Hoppenjans as she makes her Road to Roo Debut!
THE MUSIC MODERNIZATION ACT – MY TAKE
Last week I had the pleasure of attending the Industry Insights discussion of the Music Modernization Act (MMA) presented by Musicpreneur at the Nashville Entrepreneur Center.
A three-person panel (lawyer, songwriter, and publisher) gave their different points of view on key aspects of the MMA. I’d like to provide my take as an entertainment lawyer and artist manager. Below is my take on three aspects of the proposed bill. Keep in mind this is an ever-changing proposed bill, and is not signed into law yet.
Aspect #1 – Protecting Digital Service Providers (DSP’s) from Infringement Lawsuits
In an effort to get the DSP’s (e.g. Spotify, Apple Music) to the bargaining table on the new bill, the MMA eliminates anyone from suing a DSP for infringement if you have not filed a lawsuit by January 1, 2018. This is the case even though the bill won’t even be passed until long after the January 1, 2018 deadline!
In comparison, it is like someone ripped off your song and made millions, and then when you try to sue, Congress steps in and says you should have filed your lawsuit last year. Not only is this wrong, but it could certainly be held unconstitutional by the courts.
I understand the DSP’s have to gain something in return to joining the bill, but eliminating musicians’ rights with no notice is not the answer. If anything, there should be a timeframe after the MMA is enacted to sue before your claims are prohibited.
Aspect #2 – Creation of a Mechanical Licensing Collective
The MMA grants blanket mechanical licenses for DSP. In order to track the distribution of royalties to the publishers of the song, the MMA implements a “Mechanical Licensing Collective” (MLC). The MLC will allow DSP’s to easily find who they should be paying royalties to, rather than the current difficulties DSP’s have in tracking down who to pay.
The MLC will be governed by publishers and self-published songwriters. Of course, songwriters will have the burden to properly register their song in order to receive their streaming royalties. If the royalties for a particular song are not claimed within three years, the money is redistributed on a market share basis to all registered publishers/songwriters.
In general, I think this is a great improvement over the current system and a much larger percentage of publishers/songwriters will be rightly compensated as a result. Some may argue that money owed to an individual shouldn’t go away merely because they did not register within three years. I disagree. There must be some burden placed on the copyright owner to take some action in order to get paid. And rather than have unclaimed money sitting in a bank account indefinitely (according to the panel, last year the unclaimed money totaled $19 million), the money can be recirculated to the industry.
Where this aspect of the MMA goes wrong is where the unclaimed money is going. As I stated, it is redistributed on a market share to the other publishers/songwriters. The biggest piece of the pie to receive the funds will be the larger publishers, who undoubtedly have their songs registered, have the power to administrate their clients’ publishing, and in general do not need the extra cash.
Instead, the unclaimed money should be used to either fund the MLC and improve it, or should be used to fund charitable music industry organizations aligned with the goals of the Act.
Aspect #3 – The Devil is in the Details
Analysis and My Take
There are still so many issues that need to be resolved. First and foremost, the practical aspects of the formation of the MLC. What software will be used to register your songs and what company will be servicing the software? What information is going to be required to be submitted by the publishers/songwriter? How “transparent” is the MLC going to be with the public and what are the details of the auditing rights provided to the publisher/songwriters?
There are still so many details to be worked out that can make or break the implementation of the Act. The Act will likely be picked apart and morphed into several different versions before anything is passed. On the bright side, Congress and the music industry understands the need for actions to be taken in order to allow proper payment of royalties from DSP’s. This is, at the least, a step in the right direction.
WGE SPOTLIGHT – KELLY HOPPENJANS
In every WGE newsletter we will shine the spotlight on someone in the WGE who is up to something new and exciting. For our first-ever newsletter, we are shining the light on the very talented singer/songwriter Kelly Hoppenjans.
Hoppenjans is participating in Lightning 100’s Road to Roo and her first battle takes place TONIGHT starting at 6 PM at the Basement East. This is a FREE SHOW so there is no excuse to miss out on checking out the talent of Hoppenjans. Below is the link to the Facebook event.
If you haven’t heard of it before, Road to Roo is a yearly competition put on by Lightning 100. The winner goes on to play at Bonnaroo in June. A large portion of the vote comes from the fans of the show, so please get out there and vote for Kelly Hoppenjans! You can check out her music at her official site (link below).
Whiskey Ghost Entertainment is the one-stop shop for all your legal needs within the music industry, offering flat fees in order to allow musicians/music companies of all stages the ability to budget for legal help. For more, visit whiskeyghost.com.