The Music Modernization Act: Copyright Law Tuned Up or Still Flat?

So why exactly was Kid Rock in the Oval Office last week? Mr. Rock and several other prominent musicians were invited to the White House to witness President Trump signing the Music Modernization Act (MMA) into law. The statute – a combination of three separate pieces of legislation tied together – aims to bring the mechanical licensing process into the digital age, theoretically benefiting songwriters, publishers and digital service providers (DSPs) like Spotify. The industry at large has been nearly unanimous in its support, but will the MMA benefit all the players involved?

The MMA makes several important changes to how songwriters get paid. Potentially the most significant is the mandated creation of a centralized, digital database (called the mechanical licensing collective or MLC) whereby songwriters can claim ownership of their compositions. Prior to the MMA, DSPs often distributed compositions on their platforms without knowledge of and attribution to the writer, subjecting DSPs to costly legal challenge. Now, using the MLC and following set procedures, DSPs have a clear due diligence path to follow and avoid legal pitfalls. The database will be funded by the DSPs and operated by music publishers.

Prior to the MMA, DSPs had to send a Notice of Intention (NOI) to the Copyright Office for each time the DSP wished to get a compulsory license to distribute a song that was not federally registered or had incomplete songwriter information. Often the Copyright Office would be inundated with NOIs, creating a serious backlog. The MMA ends this cumbersome process, replacing it with a streamlined digital service.

The MMA almost certainly benefits DSPs, at least the ones currently existing. The database allows for a process by which, if followed, DSPs can avoid being sued for copyright infringement en masse. However, it also requires that DSPs fund the database. If such costs are in the millions, such barrier to entry may prevent future DSPs from entering into the market, potentially stifling competition and innovation.

Whether it benefits the songwriters themselves seems more tenuous. There is concern that music publishers, as gatekeepers of the database, will create a “black box” scenario, giving songwriters a limited period of time to identify their works or else lose the royalties are essentially forfeited. Considering many independent songwriters are not with a publishing company which has the resources to advocate for their writers, there may be no one to go to bat for the struggling musician.

If you are a publisher, administrator, songwriter or start-up looking to get into music distribution, we at AltView are here to help navigate the MMA, as well as other copyright and/or licensing issues you may have. Please do not hesitate to give us a call at (310) 230-5580 for a free consultation or email max@altviewlawgroup.com.