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Off The Record: The Music Modernization Act

Music & Recording Industry News By Dan Daley
Published June 2018

US copyright law could finally be entering the 21st century — and it’s good news for engineers and producers.

American politics has been bitterly vitriolic lately, but there’s one point that has drawn some remarkably partisan-free attention. The Music Modernization Act — long-overdue legislation intended to significantly update this nation’s jumbled copyright laws — moved onto a fast track in early spring to becoming law after the House Judiciary Committee unanimously recommended its approval.

Aside from the fact that it was able to get support from both sides of the political spectrum, the legislation is also notable because it’s intended to make coherent what up until now has been an astonishingly bizarre maze of national, state and even local laws and regulations around music rights. For instance, recordings made before February 15th, 1972 are not protected by US federal law, which can complicate how or even whether royalties get paid for certain uses, like plays on Internet or satellite radio. In fact, there wasn’t even a federal copyright for sound recordings (SR) until 1972; there was, instead, a warren of SR copyrights available at the state level, with each state having its own copyright terms and regulations. That’s led to a number of lawsuits by pre-1972 artists (and producers and other SR stakeholders), most notably 1960s popsters the Turtles, and attempts at the state level to enact local legislation around older recordings, as Tennessee did in 2014, to prompt action at the federal level.

Off The Record pen on cheque.Now, with the Music Modernization Act (aka HR 5447), lawmakers are trying to bring all of the disparate laws and regulations surrounding music royalties together in a single package. In fact, the bill actually unites provisions from four previously introduced bills — the Allocation for Music Producers (AMP) Act, the CLASSICS Act, the Fair Play Fair Pay Act, and a songwriter-specific version of the Music Modernization Act — under a single legislative umbrella. And while that’s important to artists and the record industry at large, this package is also addressing recording engineers and record producers, and in that way could impact the entire ecosystem of music production.

Royal Rumble

The key elements of this umbrella legislation focus on royalty mechanisms: it specifies a new collection entity to ensure that songwriters get paid for mechanical licences when digital services use their work, and establishes a market-based rate standard for both artists and songwriters whenever the government sets royalty rates. It also attempts to close that pre-1972 ‘loophole’ so that digital services will pay legacy artists the compensation they’re entitled to.

But the inclusion of the AMP Act is significant here, because it recognises producers and engineers in copyright law for the first time. It does so by specifically establishing their right to collect royalties through SoundExchange, the non-profit collective rights management organisation designated by the US Congress to collect and distribute digital performance royalties for sound recordings, when recordings are used on satellite radio and online radio services like Pandora. The key point here is that it puts in place a legal procedure for producers and engineers to collect those royalties directly from SoundExchange, rather than from the artists. SoundExchange already allows artists to pay producers and engineers their share of royalties directly, by accepting ‘Letters of Direction’, but the AMP Act would formalise this process for producers and engineers who worked on recordings made before 1995 to apply to be paid royalties directly. (The year was pivotal in this mess: the right to these funds was originally established with the passage of the Digital Performance in Sound Recording Act of 1995, and later expanded by the Digital Millennium Copyright Act.)

This piece of legislation is monumental in that it finally puts the workers on our side of the glass on a par with the artists and composers, on whom the legislative side of the music industry has historically focused. It legally acknowledges the fact that the creative side of making recordings is inextricably intertwined with the technical. Before 1972, few people could ever imagine making records outside of dedicated recording studios; since 2002, few people could imagine not being able to. In that time, digital technology has taken the idea of a recording and ripped it into small pieces, with sample-level bits becoming the basis for multi-million-dollar lawsuits, yet the music business has been working ever since that time in a regulatory environment that was the equivalent of the Wild West.

That’s why the Music Modernization Act has elicited more vocal support from the production community. During testimony advocating for the bill’s passage in Washington, DC earlier this year, Recording Academy Trustee Mike Clink, whose credits include Guns N’ Roses, Megadeth, Metallica and Mötley Crüe, testified from a producer’s perspective on the need for this unity bill, calling it “licensing reform that strengthens protections and promotes fair-market pay for all music creators across all platforms”. Recording Academy Trustee Booker T Jones (of the MGs fame) added, “What we creators need is to focus our combined efforts on a single package that resolves all of these issues. As a songwriter, producer and artist, I can tell you that creators know we’re all in this together.”

Why It Matters

By putting producers and engineers on a par with artists and composers, the Act includes them formally in what the law views as the creative process. Of course, it could open as many trap doors as it will useful ones, given the litigious nature of American corporate culture. But that’s a risk worth taking, considering how excluded those roles have been in the past. In the same manner, it could also enhance the perceptual role of the studio in the process, as well, along with the value of personal recording facilities.

Making better sense of the mess that was the copyright infrastructure of the US music business can only help those trying to make a living in it. It will let all involved put their efforts back into making music, instead of collecting on it.

Published June 2018