Music Modernization Act

The Music Modernization Act (MMA) is legislation requiring the modernization of the United States’ aging copyright system, which provides protections to artistic content creators and penalizes the theft of intellectual property. Before the MMA was signed into law on October 11, 2018, some musicians were exploited because the existing system was poorly equipped to handle digital content streaming.

The MMA was created the Mechanical Licensing Collective (MLC), an organization that collects and manages the copyrights and royalties of independent artists. The MMA provides artists with additional means to collect royalties from the use of their work. It also gives the owners of classical musical pieces that predate the introduction of federal copyright law the protections associated with it.

Background

A copyright is an exclusive legal protection of original works created by artists. It begins to apply as soon as a work is fixed in a tangible form. Copyrights protect most forms of artistic expression, including writing, musical compositions, film, photographs, poetry, and illustrations. For copyright law to apply, a work must be created by an individual and display a spark of creativity. For legal purposes, titles, names, slogans, and forms of typographic variation do not display the creativity to qualify for copyright protection. In the United States, a copyright allows people to perform and display a work in public, distribute copies of a work by sale, lease, or lending, and prepare derivative works based on the original work. Performing these activities without holding the copyright of a work is illegal.

Royalties are legally binding payments made to compensate one party for the use of another party’s assets. In many cases, this occurs when a company wants to distribute and sell copies of an artistic work but does not hold the copyright or distribution rights of that work. For example, a record company may not own the copyright to an artist’s music; however, the label and artist reach an agreement in which the artist will be paid royalties in exchange for allowing the record label to produce and sell their music.

Royalties are negotiated in advance through licensing agreements, which are unique, so the pay rate for artists varies by agreement. Many factors can influence the percentage of profits received by an artist, including the exclusivity of the agreement, the expected popularity of the work, and any available alternatives for the artist. In many circumstances, these licensing agreements benefit both the artist and the licensor. Artists provide licensors with a product to market, and licensors advertise, sell, and distribute that product on a scale that would be unavailable to individual artists.

Overview

The technological advances associated with the late twentieth and early twenty-first centuries greatly changed how music was distributed. These advanced enabled the creation of digital audio files and distribution via the Internet. This process resulted in a sudden complication of copyright law for both artists and musical distributors. These complicated laws left gaps in legal protections for many small artists. Additionally, it was often difficult for copyright owners to discover when their work was being distributed without their permission and recover any money owed from such distribution. For these reasons, Congress worked with the US Copyright Office and many major industry professionals to streamline the musical copyright process and update copyright laws to deal with the new legal landscape.

This process began in 2013, when the House of Representatives Committee on the Judiciary began examining modern copyright law and holding public hearings. Members of Congress met with both creative artists and representatives from media distribution services to find a compromise on royalty structures. This involved updating older legal systems to account for high-volume Internet streaming. The legislation slowly moved forward, working to build support from Republicans, Democrats, and all parts of the music industry. It passed the House on June 20, 2018, and the Senate on September 18, 2018. The bill was passed unanimously in both chambers. The MMA was then signed into law on October 11, 2018.

The MMA created the Mechanical Licensing Collective (MLC). This organization collects and distributes royalty payments to the owners of copyrighted works, rather than forcing copyright owners to pursue their own payments. It also collects digital audio files for copyrighted works eligible for royalty payments, and then uses those recordings to discover whether additional royalties need to be paid to an artist. Artists must submit digital audio files of their copyrighted works directly to the MLC to be sure that they are receiving all eligible royalty funding. The MLC does not interfere with private agreements between artists and clients. Typically, this includes deals with record labels and streaming services. Royalties from such agreements must be paid according to their individual contracts.

The modifications that the MMA makes to copyright law are broken down into three titles: Title I: Musical Works Modernization Act; Title II: Classics Protection and Access Act; and Title III: Allocation for Music Producers Act. Title I establishes the creation of the Mechanical licensing collective. It also replaces the existing song-by-song compulsory licensing structure with a blanket licensing system. Title II brings many sound recordings from before 1972 into the federal copyright system and extends remedies for copyright infringement to the owners of those recordings. Under the prior system, such recordings were not protected by federal copyright laws. Title III allows producers, mixers, and sound engineers to receive royalties for the use of their sound recordings.

Bibliography

“Allocations for Music Producers.” Copyright.gov, Copyright Office, United States, 2021, www.copyright.gov/music-modernization/amp/. Accessed 19 May 2022.

Banton, Caroline. “Royalty.” Investopedia, 26 Mar. 2021, www.investopedia.com/terms/r/royalty.asp. Accessed 19 May 2022.

“Classics Protection and Access Act.” Copyright.gov, Copyright Office, United States, 2022, www.copyright.gov/music-modernization/pre1972-soundrecordings/. Accessed 19 May 2022.

Gormley, Holland. “The Breakdown: What Songwriters Need to Know about the Music Modernization Act and Royalty Payments.” Library of Congress, 13 Apr. 2020, blogs.loc.gov/copyright/2020/04/the-breakdown-what-songwriters-need-to-know-about-the-music-modernization-act-and-royalty-payments/. Accessed 19 May 2022.

“Musical Works Modernization Act.” Copyright.gov, Copyright Office, United States, 2022, www.copyright.gov/music-modernization/115/. Accessed 19 May 2022.

“The Creation of the Music Modernization Act.” Copyright.gov, Copyright Office, United States, 2022, www.copyright.gov/music-modernization/creation.html?loclr=eamma#:~:text=On%20October%2011%2C%202018%2C%20the,for%20pre%2D1972%20sound%20recordings. Accessed 19 May 2022.

“The Music Modernization Act.” Copyright.gov, Copyright Office, United States, 2022, www.copyright.gov/music-modernization/. Accessed 19 May 2022.

“What Is Copyright?” Copyright.gov, Copyright Office, United States, 2022, www.copyright.gov/what-is-copyright/. Accessed 19 May 2022.