AN EVALUATION of the MUSIC MODERNIZATION ACT Bronté

STREAMING INTO THE TWENTY-FIRST CENTURY: AN EVALUATION OF THE

MUSIC MODERNIZATION ACT

Bronté Story1

I. AN INTRODUCTION TO THE MUSIC MODERNIZATION ACT

The Music Modernization Act (MMA) was passed unanimously by the House and Senate

and signed into law in October of 2018 by President Donald Trump.2 Its overall purpose is to

modernize United States copyright law by bringing it into the twenty-first century.3 One of the

most important aspects of this Act is it sets out to create a Mechanical Licensing Collective

(“MLC”), which will be funded by digital music providing services that will in turn be granted

blanket mechanical licenses for “interactive streaming or digital downloads of musical works.”4

The MLC is one of the main outcomes of Title I of the MMA, which embodies three different

titles.5 Title I’s overall purpose is to assist in the music licensing industry as more streaming

services continue to develop.6 Before this revision, streaming services required individual licenses

1. Bronté Story is a 2020 candidate for Juris Doctor from SMU Dedman School of Law. She received a Bachelor of Arts in Combined Journalism-Political Science from University of Arkansas – Fayetteville in 2017.

2. Dave Davis, Music Modernization Act of 2018 Becomes Law, COPYRIGHT CLEARANCE CTR.: COPYRIGHT BLOG (Oct. 11, 2018), http://www.copyright.com/blog/music-modernization-act- introduced-house-senate/.

3. See id.

4. Overview of the Music Modernization Act, https://lieu.house.gov/sites/lieu.house.gov/files/Overview%20of%20the%20Music%20Moderniz ation%20Act.pdf (last visited Mar. 7, 2019).

5. See Orrin G. Hatch—Bob Goodlatte Music Modernization Act, COPYRIGHT.GOV, https://www.copyright.gov/music-modernization/ (last visited Sep. 23, 2019).

6. See Davis, supra note 2.

and needed to notify the copyright holder or the copyright office to pay royalties.7 With this new

process, streaming services can receive blanket licenses for their use of music and, along with the

creation of the MLC, this licensing process becomes more efficient and user-friendly as it concerns streaming services.8 Assuming the MLC works as it should and providers comply with this new

system, providers will also be shielded and would “no longer vulnerable to lawsuits” alleging underpayment of royalties, which has been a huge issue with the implementation of previous copyright law.9

Title II is known as the CLASSICS Act, standing for the Compensating Legacy Artists for

their Songs, Services, and Important Contributions to Society.10 This title provides that recordings

prior to 1972 will be protected, meaning songwriters and artists will now receive royalties for

streaming of their work.11 This is an important contribution because it gives copyright holders the opportunity to receive compensation for others using their work when they may no longer be

compensated through other avenues, such as live performances or creating new musical works.12

7. See Bill Rosenblatt, Here Are the Loopholes Closed by The Music Modernization Act, FORBES (Oct. 11, 2018), https://www.forbes.com/sites/billrosenblatt/2018/10/11/music-modernization- act-now-law-leaves-one-copyright-loophole-unclosed/#761480a37272.

8. See Dani Deahl, The Music Modernization Act has been signed into law, THE VERGE (Oct. 11, 2018), https://www.theverge.com/2018/10/11/17963804/music-modernization-act-mma- copyright-law-bill-labels-congress.

9. See Devin Coldeway, Copyright Compromise: Music Modernization Act signed into law, THE CRUNCH (Oct. 11, 2018), https://techcrunch.com/2018/10/11/copyright-compromise-music- modernization-act-signed-into-law/.

10. See Deahl, supra note 8.

11. See id.

12. See id.

Title III’s main contribution is known as the Allocation for Music Producers (AMP) Act.13 The

AMP Act allows producers and music engineers to collect royalties from the digital transmissions of their work.14 Title IV is known as the “Severability Clause” because it adds a clause to the

MMA allowing an amendment for anything in the Act that is found unconstitutional.15 Title IV is

a discussion beyond the scope of this article because it provides a single clause that merely allows

the Act to be amended under the specific circumstance of being unconstitutional, and beyond that,

does not provide any new copyright provisions applicable to the music industry.

This essay aims to provide a thorough evaluation of the Music Modernization Act, starting

with the historical background of copyright law as it pertains to music, and how it has evolved as

technological advances infiltrate the music industry. Next, it will analyze all three main titles of

the Music Modernization Act, along with minor criticisms regarding the Act. In conclusion, this

paper will portray how this Act “offers a simple, straightforward solution” for streaming services

and others in the music industry in this digital age.16 The MMA aims to update music copyright

laws by “creating a new compulsory blanket licensing system for mechanical works,” primarily

the MLC.17 Furthermore, it will update the “rate standards applicable to music licensing, modifying the rate setting process in the Southern District of New York, and providing copyright

13. See id.

14. See id.

15. See H.R. REP. NO. 115-1551 (2018) at 27.

16. See Coldeway, supra note 9.

17. H.R. REP. NO. 115-1551 at 1.

royalties to pre-1972 artists.”18 Lastly it will ensure that “producers, mixers, and sound engineers

are able to receive compensation for their creativity.”19

II. A HISTORICAL OVERVIEW OF MUSIC AND COPYRIGHT LAW: ITS EVOLUTION ALONGSIDE MODERN TECHNOLOGY IN THE MUSIC INDUSTRY.

Over the past three and a half centuries, the idea of protecting one’s creative work began

weaving its way into copyright law in the United States, particularly with the protection of written

and performed musical works.20 One of music’s first physical forms was the creation of sheet music.21 Originally, sheet music was written by the composer and then performed for audiences,

but after the invention of the printing press, music became available for distribution and

purchase.22 This inevitably allowed those other than the original composer the opportunity to

perform it.23 By 1710, copyright law established that an author’s ownership in copyright is

protected for a fourteen-year fixed term and renewable for an additional fourteen years if the author

is alive upon the first expiration.24 The fourteen-year concept was established in order to prevent

booksellers and other authors of creative works from holding a monopoly, and created the now

well-known concept of creative works entering into public domain once copyright protection

18. Id.

19. Id.

20. See The History of Music Distribution, MN2S.COM (Nov. 18, 2015), https://mn2s.com/news/label-services/the-history-of-music-distribution/.

21. See id.

22. See id.

23. See id.

24. See Copyright Timeline: A History of Copyright in the United States, ASSOCIATION OF RESEARCH LIBRARIES, https://www.arl.org/focus-areas/copyright-ip/2486-copyright- timeline#.XIG1c1NKiqB (last visited Mar. 7, 2019).

expires.25 The Copyright Act of 1790 allowed authors the right to publish and print their literary

works, and by 1871, copyright registration had moved from individual district courts to the Library

of Congress Copyright Office.26 One benchmark revision to copyright law was established in the

an additional twenty-eight years as opposed to the original fourteen.28

By the 1970’s, the music industry not only involved the creation of music on paper, but

added physical recordings into the mix.29 Vinyl became “durable” and “popular” during the 1930’s and dominated the music industry through the 1970’s until 8-track tapes took over in the 80’s and

90’s.30 With the enhanced technology of recordings in music and television, Congress enacted the

Copyright Act of 1976.31 Its revision “preempted all previous copyright law.”32 This provision extended the term of protection for copyrighted works to the life of the author plus fifty years.33

The repeated extension of copyright protection is likely due to the increased lifespan of artists, the

physical forms music was beginning to take on, as well as the increased ability to mass produce

25. See id.

26. See id.

27. See id.

28. See id.

29. See History of Music Distribution, supra note 20.

30. See id.

31. See Copyright Timeline, supra note 24.

32. Id.

33. Id.

and distribute musical works.34 The 1976 Act also allowed works created through work-for-hire

protection for seventy-five years.35 However, in 1992, Section 304 of Title 17 was amended, which

made copyright renewal automatic and curtailed “entry of works into the public domain for works

protected” prior to 1978.36 In addition to adjusting the term of copyright protection, the 1976 Act

established a copyright holder’s exclusive rights, a basis for infringement, and elements of fair use,

and the protection was extended to unpublished works.37 As to technology, Section 108 of the

as long as it was for the purpose of scholarship, preservation, or interlibrary loans.38 As copies became readily available and educators could make copies for educational purposes, there became an exception to the general rule that authors had the exclusive right to copy and distribute their work.39 This also revolves around the concept of fair use.40 As distribution became easy and

accessible through inventions such as the Xerox machine, individuals, particularly educators and

those in professional settings, were making copies of protected works in violation of the 1909

34. See Does the Expansion of copyright laws help or hurt consumers?, NEW MEDIA RIGHTS, https://www.newmediarights.org/business_models/artist/does_expansion_copyright_laws_help_ or_hurt_consumers (last visited Sep. 24, 2019); See History of Music Distribution, supra note 20.

35. See Copyright Timeline, supra note 24.

36. Id.

37. See id.

38. See id.

39. See id.

40. See id.

Copyright Act.41 This educational exception is known as fair use of copyrighted works.42 Fair use involves four factors: (1) the purpose and character of the use; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the whole; and (4) the effect of the use on the potential market.43

After the revision of 1976, many small changes were made to the Copyright Act that

primarily revolved around keeping up with rapid developments in technology.44 For example, in

1990 Congress amended the Copyright Act to “prohibit commercial lending of computer

software.”45 This was due to the increased circulation of computer software and, from this point

on, libraries were only able to lend copies of computer software if the packaging contained a

warning of copyright protection in order to prevent users from making additional copies and

distributing them.46 By 1994, the concern for copyright protection in the digital age was in full

swing.47 The Working Group on Intellectual Property Rights sponsored the Conference on Fair

Use (CONFU) in 1994, focusing on issues within the electronic environment people were living

in.48 This conference included proposals for providing “guidelines for fair use of educational

multimedia, and proposed guidelines in a number of areas,” such as “interlibrary loan[s], electronic

41. See Copyright Timeline, supra note 24.

42. 17 U.S.C.A. § 107 (West 1992).

43. Id.

44. See Copyright Timeline, supra note 24.

45. Id.

46. See id.

47. See id.

48. See id.

reserves, digital images, and distant education.”49 Although a full report was not issued until 1998, it was clear that the digital age was entrenching on protected copyrighted works and was surpassing current copyright law.50

A. Copyright Law and the Digital Age: An Introduction to Digital Downloading and

Streaming Services

As technology improved, the traditional way of producing music was shifting as well. For

example, in Campbell v. Acuff-Rose Music, Inc., a band known as 2 Live Crew produced a song and edited it by cutting a portion of Roy Orbison’s song, “Pretty Woman,” into their own song without receiving a license for such use.51 The holders of the copyrighted song sued the rap music group for copyright infringement and the Supreme Court held that the “commercial character of the song parody did not create [a] presumption against fair use.”52 This pivotal fair use case comes

to show how new technologies in producing music created licensing issues with existing copyright laws.53 Before these technologies were created, the ability to produce music by remixing more

than one sound recording together as one piece was unheard of.54 Unfortunately, that was just the start. In 1998, “President Clinton signed the Digital Millennium Copyright Act (DMCA) into law.”55 This law was enacted to implement the World Intellectual Property Organization Copyright

49. Id.

50. See Copyright Timeline, supra note 24.

51. See Campbell v. Acuff-Rose Music, Inc., 114 S. Ct. 1164, 1166 (1994).

52. Id. at 1164.

53. See id. at 1167.

54. See Copyright Timeline, supra note 24.

55. Id.

Treaty and serves as a “means to better protect copyright in [the] digital age.”56 The Act also

provides safe harbors for Internet Service Providers (ISP’s).57 According to the safe harbor

provision of this Act, ISP’s do not have to police their users to identify infringement, but must take

down infringing material if given notice by the copyright holder or someone who is authorized to

represent him or her.58 Although at the time this Act was introduced it did not primarily deal with

the music industry, it did later make amendments that facilitated music availability online.59 It was

an important establishment in the realm of copyright law in the digital age as music downloading

on the Internet was soon to be an exploding revelation and shift in the music industry.60

By the early 2000’s, Congress continued its concern with providing copyright protections

in the digital age.61 Music and television services were no longer solely broadcasted on the television and radio, nor were movies and music albums purchased only in brick and mortar locations as VHR’s, DVD’s and CD’s.62 As the internet was beginning its boom in downloads, the

Consumer Broadband and Digital Television Promotion Act was introduced in the Senate in

2002.63 Although not signed into law, the bill would have required that “any device that can record,

56. Chamberlain Grp., Inc. v. Skylink Techs., Inc., 292 F. Supp. 2d 1040, 1043 (N.D. Ill. 2003), aff'd, 381 F.3d 1178 (Fed. Cir. 2004).

57. See Perfect 10, Inc. v. CCBill LLC, 488 F.3d 1102, 1109 (9th Cir. 2007).

58. See id. at 1111.

59. See Copyright Timeline, supra note 24.

60. See id.

61. See id.

62. See id.

63. See id.

receive, or store copyrighted digital information comply with copy-protections encoded in digital works such as DVDs, CDs,” and e-books.64 With improving technologies such as the VCR and

DVD players, individuals were allowed to watch movies and entertain others on their own televisions.65 This activity may be viewed as a violation of the copyright protections because

individuals could display protected works in their homes, and it was not actually protected

behavior until 2005.66 This is when the Family Entertainment and Copyright Act was enacted,

which included the Family Home Movie Act.67 The Family Home Movie Act allowed a “statutory

exemption for DVD players and other home movie players that contain technology to skip

objectionable content” and display movies in homes.68

Once technology started shifting away from general concepts of production and distribution for entertainment (i.e. CDs, DVDs, and so forth), books, music, and TV shows became available online.69 In the digital era, “illegal sharing of music through the Internet became more .

. . prevalent.”70 It is estimated that between 1999 and 2009, revenues for recorded music fell an

estimated 50% worldwide, which forced the music industry to rapidly adapt to these changes.71

64. Id.

65. See Copyright Timeline, supra note 24.

66. See id.

67. See id.

68. See id.

69. See id.

70. History of Music Distribution, supra note 20.

71. See id.

One vital shift in the music industry was the creation of Napster in 1999.72 This was an “online

file-sharing service” that allowed any subscribers to find and download any materials that were

shared on the platform.73 Napster’s main focus was on sharing MP3 music files and had an

estimated “80 million registered users at its peak.”74 Although extremely popular, the company

was short lived.75 Record companies and music publishers quickly brought copyright infringement

suits against Napster.76 In A&M Records, Inc. v. Napster, Inc. the court found that the record

companies and music publishers were likely to prevail on the claim that the use of their copyrighted

material was not fair use and established a prima facie case for direct copyright infringement with

a likelihood of success on the merits for additional forms of copyright infringement as well.77

Napster was the “first widely used music downloading service of any kind” and it set the stage for

more music sharing and downloading platforms to come.78 After Napster lost the case, it failed to

comply with court orders that were set to monitor music files that were infringing and was

eventually shut down.79 In 2002, Napster announced its bankruptcy, was purchased by another company, and evolved into a streaming business known as Rhapsody.80

72. See Laura Sydell, Napster: The File-Sharing Service That Started It All?, NPR (Dec. 21, 2009), https://www.npr.org/2009/12/21/121690908/napster-the-file-sharing-service-that-started-it-all.

73. See id.

74. See History of Music Distribution, supra note 20.

75. See id.

76. See A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1013 (9th Cir. 2001).

77. See id. at 1013, 1019.

78. See History of Music Distribution, supra note 20.

79. See id.

80. See id.

By 2003, Apple’s creation of iTunes was the beginning of legal downloading in the digital

era.81 It was a legal alternative to Napster’s “peer-to-peer filesharing” website and allowed users

to continue to receive music instantly, online, and without the hassle of going to the store to purchase a CD.82 By 2008, iTunes was the largest vendor for music in the United States, and the

world’s largest by 2010.83

Although Apple iTunes was a major hit for music listeners, it was a negative for record sales throughout the early 2000’s. 84 By 2017, Apple Music (Apple’s streaming service) had

around 20 million users, officially shifting the majority of music listeners online at that point.85 In addition to digital downloading services, streaming (a service that does not require downloading but is a tool that provides listeners with an instant online stream of music from a server) also became exceedingly popular for online music consumers.86 iTunes and Apple Music had to compete for customers because by that point in time there were a number of music downloading and streaming services.87 For example, in 2000 Pandora was founded and allowed users to listen

to music online through different “curated radio stations.”88 As streaming became increasingly

81. Id.

82. Id.

83. Id.

84. History of Music Distribution, supra note 20.

85. Micah Singleton, Pandora Premium: The Original Music Streaming Giant is Ready for Prime Time, THE VERGE (Mar. 13, 2017), https://www.theverge.com/2017/3/13/14889122/pandora- premium-music-streaming-service-preview-interview.

86. What is Streaming Music and How Has it Changed the Industry?, MN2S (Apr. 23, 2018), https://mn2s.com/news/label-services/what-is-streaming-music-changed-industry/.

87. History of Music Distribution, supra note 20.

88. Brett Molina, Pandora founder Westergren to step down as CEO, USA TODAY: TALKING TECH

popular and users wanted more personalized music, Pandora launched a premium subscription

service in 2017 where users could choose which songs they wanted to listen to, save, and organize

as opposed to the generic radio station format of Pandora’s first user model.89 Spotify, another

streaming service, had around 100 million users by 2017 and was also growing in popularity

among music consumers.90 Spotify allows users to listen to “uninterrupted music of their choice”

from a massive collection of music (all supposed to be legally licensed) for a monthly subscription

fee.91 This shift from downloading to streaming happened quickly and, as it seems, without much

thought to the legal context regarding how it may affect sales for musicians who relied on online

downloads and CD sales for a major portion of their income.92 This begs the questions of what streaming services are, how they became so popular so fast, and why Congress found the need to draft the MMA.93

Streaming services started in the mid to late 2000’s and have become one of the main

sources of music for listeners today.94 In the US alone, annual revenues in the music market fell

(June 27, 2017), https://www.usatoday.com/story/tech/talkingtech/2017/06/27/pandora-founder- westergren-step-down-ceo/431318001/.

89. Singleton, supra note 85.

90. Id.

91. History of Music Distribution, supra note 20.

92. See Sam Wolfson, ‘We’ve got more money swirling around’: how streaming saved the music industry, THE GUARDIAN (Apr. 24, 2018), https://www.theguardian.com/music/2018/apr/24/weve-got-more-money-swirling-around-how- streaming-saved-the-music-industry.

93. See H.R. REP. NO. 115-1551; see Wolfson, supra note 92.

94. Wolfson, supra note 92.

from $14.6 billion in 1999 to $6.3 billion by 2009.95 As of 2017, streaming revenue from Warner

Music was double the amount of physical sales and “triple that of downloads.”96 Streaming essentially works by sending information from a server to an individual’s electronic device, such as a computer or smart phone.97 The server holds the actual song “as a raw file,” which has to be

compressed in order to be streamed online through someone’s device.98 When the information is

sent, the device “decode[s] the compressed information using” a streaming app.99 Each streaming

service holds a large number of songs, including albums and playlists that can be decoded and

streamed to anyone using the app at any given time.100 Theoretically, no matter what device is

used as long as it is connected to the Internet, any song could play from this library on the platform

by every user at one time.101 Unlike Napster, these services provide legal streaming (not illegal

downloading) available on a subscription basis and requires the obtaining of licenses from the

subscribers.102

95. Id.

96. Five ways streaming has changed the music industry, INSIDER.CO.UK (May 9, 2017), https://www.insider.co.uk/news/five-ways-streaming-changed-music-10386823.

97. What is Streaming Music, supra note 86.

98. Id.

99. Id.

100. Id.

101. Id.

102. Rosenblatt, supra note 7.

Although authorities found that some of the most popular streaming services helped with music piracy issues with regard to illegal downloading such as with Napster, one major concern that remained was how much artists were getting paid per stream.103 At one point, news

publications reported streaming services like Spotify were only willing to pay artists a couple of

thousandths of a penny per streamed song.104 Historically, the music industry revolved around new

releases of songs as they came out on a single track or hit the radio.105 Once released, artists waited, crossing their fingers and hoping their single would climb the charts to the top.106 Now, streaming

has altered the traditional process and listeners are bingeing albums the moment they drop onto

the streaming services.107 With this process, many artists can have multiple songs of an album hit

the charts and sink back down within a few days once another album or single drops and is released

onto a streaming platform.108

Some argue this streaming pattern prevents artists from large sale possibilities, especially

with the little amount they are paid per stream.109 Consequently, some artists with more power in

the industry are likely paid more per stream than the average musician on streaming platforms.110

Artists like Taylor Swift and Beyoncé decided to withhold releases from streaming services

103. Wolfson, supra note 90.

104. Id.

105. Five ways, supra note 92.

106. Id.

107. Id.

108. Id.

109. Id.

110. Wolfson, supra note 94.

because of the power imbalance with how little artists were being paid prior to the MMA.111

Smaller artists are powerless in some ways compared to the labels who collect most of the profit.112

However, it is arguable that streaming a song cannot be equated to a CD sale of a single because

each time a song is streamed a portion of the profit goes to the artist.113 In other words, it’s not a

one-time transaction.114 The multitude and complexity of issues with the new technology of

streaming engulfing the music industry is why the Music Modernization Act was signed into law

in the first place.115 The previous copyright law was not well-equipped to handle the licensing and royalty distribution that came with the complexity of how streaming changed the music industry from the traditional model.116 This is undoubtedly the primary reason for the enactment of the

MMA in the first place.117

III. LEADING UP TO THE MUSIC MODERNIZATION ACT AND HOW IT HAS SAVED SPOTIFY

Although the introduction of streaming services has without a doubt changed the music

industry, arguably in very positive ways, there are downsides, particularly for the artists and record

labels that were deeply impacted by this shift. For example, as of April 2018, Spotify had a paid

subscriber base of an estimated 71 million.118 Although Spotify has clearly become a success,

111. Id.

112. Id.

113. Id.

114. See id.

115. H.R. REP. NO. 115-1551 at 1.

116. Id.

117. Id.

118. Paul Resnikoff, Spotify Is About to Receive a Giant Gift from Congress. Which Might Explain Their Latest Acquisition, DIGITAL MUSIC NEWS (Apr. 12, 2018),

worth $26.5 billion on Wall Street at one point, it has lost an estimated amount of just over $1

billion from 2015 to 2018.119 Although Spotify’s estimated worth is clear in addition to its seventy

million paying subscribers, one of its major downsides is the royalty costs to copyright holders

that would have “permanently crimp[ed] future profit margins” if it were not for the enactment of

the MMA.120 The enactment of the MMA will benefit Spotify and other music streaming services

and save them from previous licensing issues and lawsuits streaming companies faced leading up

to the Act’s implementation.121

“The Music Modernization Act . . . will forgive Spotify for years of bad behavior.”122

Spotify has found itself in a sea of trouble, facing lawsuits that seek to provide justice to “under- compensated” songwriters and other copyright holders “as the music industry shifts to streaming.”123 One of the most publicized lawsuits against Spotify was filed on December 29,

2017, by Wixen Music Publishing for $1.6 billion.124 This suit holds tremendous significance

because of the major changes in the law MMA presents for streaming services and the copyright

https://www.digitalmusicnews.com/2018/04/12/spotify-loudr-music-modernization-act/.

119. Id.

120. Daniel Sanchez, Spotify Has Lost Nearly $1 Billion In the Past Two Years, Financials Show, DIGITAL MUSIC NEWS (Feb. 7, 2018), https://www.digitalmusicnews.com/2018/02/07/spotify-1- billion-losses/.

121. Rosenblatt, supra note 7.

122. Resnikoff, supra note 118.

123. Daniel Kreps, Wixen’s $1.6 Billion Spotify Lawsuit: What You Need to Know, ROLLING STONE (Jan. 3, 2018), https://www.rollingstone.com/music/music-news/wixens-1-6-billion-spotify- lawsuit-what-you-need-to-know-202532/.

124. Id.

holders in the music industry.125 The MMA eliminates certain legal remedies for music publishing companies who file suit against music streaming services after January 1, 2018.126 Wixen claimed

Spotify was legally “required to notify songwriters in writing” that they were part of Spotify’s

music library.127 Wixen is a California-based publishing company that licenses music for over

2,000 artists, including Tom Petty and the Beach Boys.128 According to Wixen, its artists represent

“between one to five percent of the music streamed on Spotify.”129 Wixen also argued that Spotify

has a licensing and royalty system, through the Harry Fox Agency, that is “ill-equipped to obtain

all the necessary mechanical licenses.”130 The Harry Fox Agency is one of the main agencies in

the music industry that represents publishers and issues “licenses and collect[s] and distribute[s]

royalties” on behalf of publishers.131

This licensing process under previous copyright law has been a prevalent and continuous

issue for streaming services like Spotify and is due in large part to the enhancement of technology

with a legal framework that was not enacted for such uses.132 The licensing process employed

125. Id.

126. Id.

127. Sarah Jeong, A $1.6 Billion Spotify Lawsuit is Based on a Law Made for Player Pianos: The hidden costs of streaming music, THE VERGE (Mar. 14, 2018), https://www.theverge.com/2018/3/14/17117160/spotify-mechanical-license-copyright-wixen- explainer.

128. Kreps, supra note 123.

129. Id.

130. Id.

131. HARRY FOX AGENCY, https://secure.harryfox.com/public/FAQ.jsp#1 (last visited Mar. 8, 2019).

132. Jeong, supra note 127.

throughout the music industry originally made sense when it was created through the Copyright

Act of 1909, which was created to provide royalties for songwriters, for publishing companies,

and others to use their work.133 This royalty system worked automatically, meaning rates for the

use of works did not need to be negotiated with individual songwriters, and were known as

compulsory licenses for use of sheet music created by songwriters.134 The mechanical/compulsory

license was used to “copy and distribute” musical compositions written by songwriters that were

then administered by publishers or other music providers.135 The actual sound recording of any given song had to be obtained using a mechanical license for the specific artist who recorded the composition as well.136 Prior to the MMA, this process should have been used for every piece of

music and sound recording used in Spotify’s catalog of music, along with any other streaming

service with a similar model, such as Apple Music.137 Since the beginning of the 1909 Act, it was

up to the music providers, now streaming services, to identify the copyright holders of each song

and pay them the compulsory royalty for their use.138

In addition, the creation of recording technology and the ability to create collaborated

musical works has only revealed more issues regarding licensing for modern music providers

under old Copyright law.139 Historically, licensing for radio use was a simpler process, only having

133. Id.

134. Id.

135. Rosenblatt, supra note 7.

136. Id.

133. Id.

138. Overview, supra note 4.

139. Jeong, supra note 127.

to pay for performance rights, because it was analogous to public performance and radio stations

did not have to pay royalties for licensing of sound recordings.140 As downloading and streaming

services entered into the industry during the introduction of the digital consumer age, licensing

practices shifted because downloading a piece of music was more analogous to purchasing a track

and taking it home for individual private use.141 Businesses like Spotify and Apple Music had to

retrieve licenses for both the recording and the written composition.142 Even though consumers

may see their use as something that is not so different than before (i.e. listening to the radio versus

Spotify or Pandora in their car just the same), there are different legal avenues to maintain a

business in the music industry.143 This drastic shift created legal issues even before the Wixen lawsuit.144 Spotify agreed to a $30 million settlement with the National Music Publishers’

Association (NMPA) and a $43.4 million settlement “filed by songwriters Melissa Ferrick and

David Lowery” to compensate songwriters who had not received their rightful royalties.145 Wixen

and Spotify eventually agreed to settle the lawsuit for a grand total of $112.5 million.146 Wixen maintains that its settlement was “substantively unfair” while Spotify insists the issue was never the “reluctance to pay, but the fact that tracking down licensees and publishers” was

140. Id.

141. Id.

142. Id.

143. Id.

144. Id.

145. Jeong, supra note 127; Kreps, supra note 123.

146. Daniel Cooper, Spotify Settles Music-licensing Lawsuit for $112.5 Million, ENGADGET (May 24, 2018), https://www.engadget.com/2018/05/24/spotify-pays-licensing-settlement/.

problematic.147 In the future, the MMA should theoretically solve the specific issues raised by

Wixen and the other lawsuits previously brought against streaming services.148 Now, what most

players in the music industry are likely asking is what that will realistically look like.149

IV. THE MUSIC MODERNIZATION ACT: WHAT IT IS AND HOW IT WILL CHANGE THE MUSIC

INDUSTRY

As mentioned previously in this article, copyright laws in the United States are and always have been established to allow creators of music and other artists to hold exclusive rights in their work and to encourage creativity and innovation in our society.150 House officials admit the

previous “statutory scheme applies inconsistent rules that place certain technologies at a

disadvantage and result in inequitable compensation variances for music creators.”151 These

problems with copyright regulations, which were difficult to abide by, created licensing issues and

hindered artists from being adequately compensated for their copyrighted works’ use.152 The law

as of 2018 was not able to keep pace with the music industry both in “consumer preferences and

technological developments.”153 The law applied inconsistent rules and resulted in unequal

147. Id.

148. Dani Deahl, Spotify and Wixen Settle the Music Publishing Company’s $1.6 Billion Lawsuit, THE VERGE (Dec. 20, 2018), https://www.theverge.com/2018/12/20/18150197/spotify-wixen- lawsuit-settlement-dismissal-music-publishing.

149. Id.

150. H.R. REP. NO. 115-1551 at 1.

151. Id.

152. Id.

153. Id.

compensation for music creators.154 To address these issues, the MMA was introduced in both the

Senate and House to present music law reform in order to become up to date with the current

industry and what it is moving toward.155 Streaming services are one of the main focuses

throughout the MMA because this is where consumers are shifting to and where most of the

licensing issues currently lie.156

Since the digital revolution, the law has not been able to keep up with technology and the

MMA is an innovative and modern attempt to change the law to “repair” and “balance the interests

of artists and the tech giants who need them.”157 The overall purpose of the MMA is to generally

update copyright law.158 This goal will be achieved by:

creating a new compulsory blanket licensing system for mechanical works, updating the rate standards applicable to music licensing, modifying the rate setting process in the Southern District of New York, providing copyright royalties to pre-1972 artists, and ensuring that producers, mixers, and sound engineers are able to receive compensation for their creativity.159

The following portions of this essay will provide an evaluation of all three Titles of the MMA,

what they are and a prediction of their effects on the current music industry.

154. Id.

155. Id.

156. Overview, supra note 4.

157. Andrew Flanagan, A Music Industry Peace Treaty Passes Unanimously Through Congress, NPR: MUSIC NEWS (Sept. 19, 2018), https://www.npr.org/2018/09/19/649611777/a-music- industry-peace-treaty-passes-unanimously-through-congress.

158. H.R. REP. NO. 115-1551 at 1.

159. Id.

A. Title I. Modernizing the Music Licensing Process

Title I of the MMA revolves around reforming Section 115 of Title 17 of the United States

Code.160 Some of the most important and significant changes that stand out from the enactment of the MMA include the change in how judges review rate disputes and the creation of the Mechanical

Licensing Collective.161 Originally, under Section 115, anyone could seek a compulsory license and “reproduce a song in exchange for paying a statutory rate.”162 The Copyright Royalty Board

(CRB) was responsible for “setting the statutory rate” in order to “apply a legal standard” across

the board, even if this did not reflect the actual market value of the song.163 The American Society of Composers, Authors and Publishers (ASPCA) and Broadcast Music Incorporated (BMI) were assigned to one rate court judge and every case regarding compulsory licensing issues was adjudicated before each performance rights organization’s (PRO) “designated consent decree judge,” but the Music Modernization Act will change this process altogether.164 With this new system, referred to as the “wheel” approach, a district judge in the Southern District of New York will be randomly assigned for settling rate disputes which will allow the judge to consider the free- market value when making such determinations.165 This will permit judges to have a fresh

160. Id. at 2.

161. See Overview, supra note 4.

162. Id.

163. Id.

164. See id.

165. See id.

approach because they will be assigned cases on a rotating basis, as opposed to the previous

scheme of being assigned a single judge that may have impressions from prior cases.166

In addition, Section 114(i) of Title 17 will be repealed under the MMA.167 This section forbid rate courts from overseeing governing decrees the two major PROs followed when considering certain evidence regarding royalty rates.168 Additionally, judges were barred from considering royalty rates of sound recordings as relevant when determining “performance royalty rates for songwriters and composers.”169 This arguably created an uneven playing field amongst

songwriters due to the lack of predictability and is the main reason why this section is being

repealed under the MMA.170 This is one of the primary rationales for selecting judges at random

under the new law.171 It is also why, in the future, songwriters will have the opportunity to “obtain

fairer rates” and are allowed to present evidence regarding the music market for judges to consider

during rate hearings.172 Now, the MMA establishes a uniform buyer and seller rate standard for

licenses and will be closer to the rates that would be negotiated at free market value.173 This will

166. See id.

167. Overview, supra note 4.

168. Id.

169. Id.

170. Id.

171. Id.

172. Id.

173. Summary of H.R. 1151, the Music Modernization Act (MMA), COPYRIGHT ALL., https://copyrightalliance.org/wp-content/uploads/2018/10/CA-MMA-2018-senate- summary_CLEAN.pdf (last visited March 9, 2019).

ultimately allow for a more efficient judicial process with rate disputes and will impose a fair

market rate for artists receiving royalties.174

Section 115 also previously required a Notice of Intent through the Copyright Office from

anyone who wanted to use and reproduce a song that could not identify the copyright holder in

order obtain a compulsory license.175 However, this process had the common issue of preventing

songwriters from being compensated in a timely manner or even compensated at all.176 This notice requirement will change entirely once the MMA is in full swing.177 One of the MMA’s most

notable changes in copyright law is the creation of the Mechanical Licensing Collective (MLC).178

The MLC will be funded by digital services such as Apple Music, Spotify, and other online digital

music providers, and will be run by publishers and other self-published songwriters.179 The MLC

will allow for online music providers to receive “blanket mechanical licenses for interactive

streaming or digital downloads of musical works.”180 This will in effect prevent the compulsory

licensing issues from the notice of intent process in the previous statutory scheme and hopefully

enable more efficient compensation for songwriters and other music creators.181 Another aspect the MLC will bring to the table is the creation of a “publicly accessible database housing [all] song

174. See id.

175. Overview, supra note 4.

176. Id.

177. See id.

178. Id.

179. Id.

180. Id.

181. Overview, supra note 4.

ownership information.”182 This will enable the MLC to identify songs and match them to songwriters and publishers who own copyrights in them in order to get copyright owners paid for

the use of their work.183 This creation of the database furthers the purposes of the MMA and the

overall policy goal of copyright law in and of itself.184 The database will allow for those who deserve compensation to be provided it and will encourage others to be creative and innovative with the guarantee that the royalty process is now more efficient and more likely a guarantee.185

More specifically, Title I of the MMA changes the law with regard to compulsory licenses,

the procedure involved in obtaining them, transitioning the process from compulsory licenses to

blanket licenses, the distribution of royalties and court proceedings involved with that, and the

creation of the MLC. 186 Originally, the copyright owner of a nondramatic musical work had the

right to authorize the first recording of that work, then usually the record label would obtain the

right through a compulsory license to make a sound recording and distribute, or have a publisher

distribute, the phonorecords.187 If a digital music provider was the first person to produce and

distribute phonorecords, now days digital phonorecord deliveries (DPDs), of the sound recording

of that work the provider had to obtain a compulsory license for that use given authorization by

the respective parties involved.188 Now, a digital music provider may obtain a compulsory license

182. Id.

183. Id.

184. Id.

185. Id.

186. See H.R. REP. NO. 115-1551 at 2.

187. Id.

188. Id.

on a “work-by-work” basis as before, or may obtain what will be known as a blanket mechanical

license to “make and distribute DPDs.”189

To implement this new process thoroughly, the procedure for obtaining a blanket license

may not be available for an estimated two-year period.190 Within this two-year period of time, if the copyright holder is unknown and is unable to be found, music providers will still have to submit notice to the Copyright Office.191 This will be the normal procedure until blanket licenses are

readily available and until providers can notify the MLC of their use.192At that point, then service

providers will have to turn over royalties to the collective for their use of the work.193 Once digital

music providers are able to obtain blanket licenses for their use of musical works, they will no longer have to file a notice of intent to use.194 They will notify the MLC and to be warned will be

“foreclosed from obtaining a blanket license [of the work] for three years” if they fail to do so.195

The digital music provider has a grace period however, and after the MMA is enacted, the

provider no longer has to file notice of intent.196 This means that if the provider is unable to find

the copyright owner the provider will be immune from infringement liability of using a musical

work without a license as long as the music provider engages in “good-faith [and]commercially

189. Id.

190. Id.

191. Id. at 3.

192. H.R. REP. NO. 115-1551 at 3.

193. Id.

194. Id.

195. Id.

196. Id. at 8.

reasonable efforts to identify and locate musical work copyright owners.”197 Once available, the

blanket license will be automatically substituted for the compulsory license and if the owner is still

not found, the provider is required to provide a usage report and accrued royalties into the MLC.198

One aspect of this process that must be noted is that once the blanket license process starts, digital

music providers must allow the MLC thirty days to reject the notice of use with an additional thirty

days to cure for a potential licensee.199 All this requires is that the music streaming service wait

for the MLC’s permission for the unlicensed use (if the true owner of the copyright cannot be

found) until the provider can begin using the work for itself.200 This transition period may be a bumpy start for the beginning of implementing policies of the MMA, but seems to be a necessary process in order to give the Board in charge of implementation the opportune amount of time to create the MLC in order to begin applying the new legal concepts of the MMA.201

One of the most significant aspects of the MMA’s change to Title 17 is section 115(d),

which “establishes a blanket compulsory licensing system for qualified digital music providers,”

also known as the MLC.202 This is a major addition to copyright law because it will make the legal process for licensing efficient, allowing those seeking to obtain licenses a simple legal solution.203

197. Id.

198. H.R. REP. NO. 115-1551 at 3.

199. Id. at 9.

200. See id.

201. See id. at 8.

202. Id. at 3.

203. See id.

Not only does this process help those seeking licenses (streaming services), but it will also help

songwriters, performing artists, and composers obtain compensation without difficulty as well.204

There are specific legislative criteria the Board of the Directors, officers, and committee

members must meet in order to take part in operating the MLC, but these specifications are beyond

the scope of this article.205 However, some notable aspects of these stipulations include, but are not limited to, the fact that the “collective is only liable to a party if its actions are grossly negligent in carrying out the policies and procedures adopted by the Board,” no later than a year after enactment the “collective must make public bylaws relating to the governance of the collective,” and the “Register is allowed to re-designate an entity to serve as the collective every [five] years after the initial designation.”206 The key point in the creation of the MLC, also noted above, is the

agreement that the cost of the new MLC will be that of the licensees, or digital music providers.207

The policy behind this determination is that they will be benefiting most from this new system and

should bear “reasonable costs of establishing and operating” the MLC.208 A reasonable amount is

to be determined by the Copyright Royalty Judges and any unreasonable costs should not be

undertaken by the licensees but by the collective itself or other copyright owners who benefit from

the collective.209 Additionally, one of the primary policies of the MLC is to be transparent and

accountable, including the requirement to submit audits beginning the fourth year of its operation

204. See H.R. REP. NO. 115-1551 at 4.

205. Id.

206. Id.

207. Id.

208. Id. at 5.

209. Id.

and every fifth calendar year after. 210 These reports will then be made available to the public via

Internet access.211

The MLC’s transparent policy notions run through not only its day-to-day procedures and

overall operation but furthers these practices by creating a musical works database that will be

publicly available.212 Due to the increase in availability to music downloading and retrieving mass

amounts of music online almost instantly, unmatched works have become increasingly common

and artists are inevitably not getting paid proper royalties, i.e. the Wixen lawsuit.213 This database

will be created to “link sound recordings with their underlying musical works.”214 The new system

is highly anticipated since works can be commercialized prior to clearing all the proper paperwork

when it is difficult to find the copyright owner.215 Overall, this database will increase the efficiency

of the licensing process and will further the MMA’s purpose in making the licensing process easier

for artists to receive royalties as well as transparent in the music industry.216 It is also the MLC’s

job to distribute royalties to artists for matched and unmatched works.217 For matched works, the

provider will pay royalties to the MLC who will distribute them to known artists, and for

unmatched works, the MLC will be given a three-year search period for the rightful owner of such

210. H.R. REP. NO. 115-1551 at 6.

211. Id.

212. Id.

213. Kreps, supra note 123.

214. H.R. REP. NO. 115-1551 at 6.

215. See id.

216. See id. at 6.

217. See id. at 11.

royalties before they are distributed otherwise.218 One other aspect of the MLC’s transparency policy initiatives is the fact that the collective will maintain a site that will be publicly accessible and hold all the contact information for the collective and a list of unmatched works in order for the claiming process to be quick and easy for individuals to claim royalties.219

Overall, Title I’s main focus is to improve the licensing process for digital music providers

and distribute royalties to artists who have been hindered by the music industry’s attempts to

comply with the difficult web of prior copyright law.220 It will also help shield liability for music

providers when facing any litigation regarding these issues after January 1 of 2018.221

Theoretically, now Spotify and other digital music providers will be handed a legal entity (the

MLC) to process their licenses and distribute royalties with efficiency like never before.222

B. Title II: The CLASSICS Act

Title II, the Compensating Legacy Artists for their Songs, Services, and Important

Contributions to Society Act, also known as the CLASSICS Act, provides protections for

United States Code that adds a new Chapter 14 to the Title “concerning pre-1972 works.”224 Its main focus is to guarantee royalties for songwriters and artists who own copyrights in their works

218. See id.

219. Id. at 12.

220. H.R. REP. NO. 115-1551at 1.

221. Flanagan, supra note 157.

222. Id.

223. Davis, supra note 2.

224. H.R. REP. NO. 115-1551 at 24.

for recordings created prior to 1972.225 Overall, rights provided in Chapter 14 to pre-1972 works

are “transferrable and licensable in the same manner as copyrights in post-1971 recordings.”226

The rationale behind Title II is arguably due to the fact that these copyright holders are likely no longer making a profit off of performing live and should gain digital performance rights equal to ones that apply to newly produced recordings that are currently used on streaming services and satellite radio in order to be compensated properly for their works use.227 These protections created

under Chapter 14 are intended to be “enforceable against State entities to the maximum extent

constitutionally permissible.”228 From this point on, pre-1972 recordings will have the same

protection applied to them as all copyrighted works and violation of those rights are actionable in

federal district court, are subject to regular federal copyright protection and the same remedies are

applicable.229 In addition, unlike more recent musical works, copyright registration is not required

for these works in order to bring action for violation of these protected rights.230 Under this

equalizing strategy, pre-1972 recordings are subject to the same licensing scheme as all other

recordings.231 This means that streaming services and other music providers wanting a license for

225. Davis, supra note 2.

226. H.R. REP. NO. 115-1551 at 26.

227. Mitch Stoltz, The New Music Modernization Act Has a Major Fix: Older Recordings Will Belong to the Public, Orphan Recordings Will Be Heard Again, EFF (Sept. 19, 2018), https://www.eff.org/deeplinks/2018/09/new-music-modernization-act-has-major-fix-older- recordings-will-belong-public.

228. H.R. REP. NO. 115-1551 at 24.

229. Id.

230. Id.

231. Id.

digital audio transmissions (streaming) or public performance right must go through the same

process created under Title I to obtain a blanket license for the use of pre-1972 recordings just as

they would for any other recording created post-1972.232 Giving this type of right to copyright owners who created music prior to 1972 is a practical and fair amendment to copyright law because it essentially prevents digital music providers from ripping off copyright holders of this specific generation from their right to copyright protections of the works they created.233 Other subsections also reiterate this equalization theme by ensuring that safe harbors, defenses, and provisions from the DMCA equally apply to pre-1972 recordings.234

Further, this Act indicates that the federal right for pre-1972 recordings is considered an

“intellectual property right for the purpose of the exception contained” in the Communications

Decency Act.235 Lastly, this chapter allows for certain deals and settlement agreements made prior

to the enactment of the MMA to be credited.236 For example, if a recording company and streaming

service had an agreement regarding royalty payments that “qualifies for the statutory license,”

performing artists will be paid the same share of performance royalties they would have been paid

“under the statutory licensing regime.”237 This also applies to agreements made, for example,

regarding pre-1972 recordings with Satellite Radio going back to 2015.238 This assurance that

232. Id.

233. See id.

234. CONFERENCE REPORT, supra note 15 at 25.

235. H.R. REP. NO. 115-1551 at 25.

236. Id.

237. Id.

238. Id.

certain provisions under old copyright law will still be enforced with regard to certain contracts

and settlements only ensures entities in the music industry that legislators are aware of the

complexities of this enactment and have written in attempts to make the transition go as smoothly

as possible.239

Title II also brings older recordings into the public domain sooner than they would have

under previous copyright law.240 This allows recordings prior to 1972 to “enter the public domain

on a rolling basis” 95 years post-publication.241 In theory, recordings made prior to 1923 will very

soon enter the public domain free of all copyright protection and recordings made between then

and 1972 will enter the public domain on a rolling basis, given the new 95-year rule.242 Although the law sets a 95-year public domain entry, it is the intent of Congress that it may not necessarily be immediate.243 Since many recordings that were published prior to 1972 would likely be protected “for a shorter period” of time under federal law than under state law under this new legislation, a “further transitional period” may be allowed that exceeds the standard 95-year period

in order to “diminish the risk that due process rights would be violated by taking property without

just compensation.”244 The true meaning of this explanation is yet to be defined, but it is clear that

Congress has the understanding that these new processes will take time, and surely some leeway,

239. Id.

240. Stoltz, supra note 225.

241. H.R. REP. NO. 115-1551 at 24.

242. Stoltz, supra note 225.

243. H.R. REP. NO. 115-1551 at 24.

244. Id.

to transition into full-enforcement of the newly enacted copyright legislation.245 For example, in

addition for this transitional period, subsection (e) of Chapter 14 “preempts claims under state law”

that arise from digital transmissions or reproductions of older works that were made before this

chapter’s enactment “under certain circumstances.”246 This is yet another acknowledgement by

the United States legislature that the enforcement of these new but improved processes will not

only take time, but will also likely have to allow for certain exceptions due to prior arrangements

under old copyright law.247

One other rationale behind this firm protection for older works is due to their common

commercial exploitation.248 However, there are traditional exceptions for non-commercial use.249

Title II allows for a process to request from rights owners’ of works that are not commercially

exploited the non-commercial use of their copyrighted works, which includes “teaching,

scholarship and research.”250 This permission is at the sole discretion of the copyright holders of

the musical works.251 In order to take part in this process, a seeking user must first search diligently before making his request through a Copyright Office filing.252 In addition, the Act provides civil

245. Id. at 15.

246. Id. at 25.

247. Id. at 15.

248. Id. at 26.

249. H.R. REP. NO. 115-1551, at 25.

250. Id.

251. Id.

252. Id.

penalties for bad faith conduct.253 Overall, the process was created in order to enable use of works

in situations where it may be difficult to contact or find the rights owner for their permission when

their work is not generally commercially available.254

C. Title III: The AMP Act

The last Title of the MMA, the Allocation for Music Producers (AMP) Act, is the first

legislation that recognizes how producers and sound engineers should receive due royalties under

the law.255 Ultimately, this Act allows producers and sound recording engineers to collect royalties

under U.S. Copyright law, which is something that has never been acknowledged by legislatures

before pertaining to copyright.256 This Act does not create any new protections for producers, it

does however create legislation that provides a “legal procedure” for producers and sound

engineers to collect the royalties that are owed “from SoundExchange, rather than from the”

individual “artist.”257 SoundExchange is an organization that “collects and distributes digital

performance royalties” for recording artists and “master rights owners accounts and administers”

agreements “on behalf of rights owners and licensees.” 258 One very important factor about this

253. Id.

254. See generally, id. at 24-26.

255. For Studio Professionals, GRAMMY.COM, https://www.grammy.com/advocacy/issues- policy/studio-professionals (last visited Mar. 11, 2019).

256. Id.

257. Robert Levine, Allocation for Music Producers (AMP) Act Introduced in Senate (Mar. 23, 2018), https://www.billboard.com/articles/business/8257740/allocation-music-producers-amp- act-introduced-senate.

258. SOUNDEXCHANGE, https://www.soundexchange.com/about/ (last visited Mar. 11, 2019).

act is that it lacks Congressional opposition because the process was already relatively in play even

though it was yet to be written into the new legal processes of the MMA.259

Not only does the AMP Act codify the existing SoundExchange process for producers,

sound engineers, and mixers to receive their payments for use of copyrighted material, but the Act

also provides a new legal procedure for pre-1995 musical works.260 This process requires that any

entity or individual wanting to obtain rights or pay royalties for use of another’s work through the

SoundExchange process must provide four months’ notice to the owner.261 In order for the use to

be legal, there must be no objections from the copyright owner before the set percentage of

royalties can be paid to producers, sound engineers, and mixers for their use of the copyrighted work.262 There are, of course, traditional exceptions for abandoned material for when the copyright

owner cannot be located.263 This Act will provide a process that has been used in the past, but will

go a step further by codifying it into copyright law. This is beneficial to persons in the music

industry because it recognizes producers, mixers, and sound engineers under copyright law and

gives them a legal process to act accordingly when copyright issues arise.264

259. Levine, supra note 257.

260. H.R. REP. NO. 115-1551 at 27.

261. Id.

262. Id.

263. Id.

264. Levine, supra note 257.

IV. Criticisms and Justifications of the MMA

Although the enactment of the MMA is ultimately a step in the right direction to

modernizing copyright law for the music industry, it is not without its criticisms.265 As stated

above, Spotify has settled with many entities in the field ending in multi-million dollar losses on

Spotify’s end.266 However, it is arguable people may not feel bad for Spotify and other streaming

services because the MMA’s enactment draws a clear line prohibiting any further litigation by

As of January 1, 2018, lawsuits of this kind against streaming services will be considered null and

void.268 Some argue this prevention from what some artists may be rightly owed is “outright

unconstitutional.”269 On the other hand, the noise has to stop at some point. Congress recognized

the need to update music copyright law to adapt to what has already become the norm for music

listeners around the world, music streaming services.270 In order to do this, a cut-off point has to

be set to some extent or else copyright holders may be incentivized to hold off on lawsuits in order

to let royalties add up and receive larger payoffs from streaming services in settlement agreements.

In addition, the overall purpose of the newly enacted MMA is to create a process that is efficient, one that aims to mend all previous issues that came along with old copyright legislation.271

265. Resnikoff, supra note 118.

266. Kreps, supra note 123.

267. Resnikoff, supra note 118.

268. Id.

269. Id.

270. H.R. REP. NO. 115-1551 at 27.

271. Id.

Therefore, the newly enacted law must have some restriction for how long major players in the music industry have to claim their royalties under the previous laws through lawsuits against streaming services.272 An unlimited timeline would simply be impractical. On a final note, as mentioned before, the major entities taking part in the music industry who interact with streaming services like Spotify and Apple Music have already gotten their payoff and are likely no longer concerned with their ability to sue the streaming service for what they may be owed.273

Another criticism of the MMA is that “Congress should not be adding new rights in works created decades ago.”274 This critique stems from the long protections extended to copyrighted works prior to 1972 under Title II.275 The main argument provided by this criticism is that copyright protections from some recordings will extend until 2067, allowing up to 110 years of copyright protection from the first publication date of the musical work in some cases.276 This is

arguably too long and is actually longer than any other U.S. copyright protection enacted in the

past.277 The ultimate argument is that providing copyright protection for this amount of time does

not create any incentives for new creativity.278 However, regardless of the multitude of copyright

protections that have been enacted since the early 1700’s, music styles, as well as technologies in

the industry, have continually evolved throughout the past few centuries of the American music

272. Flanagan, supra note 157.

273. Resnikoff, supra note 118.

274. Stoltz, supra note 225.

275. Id.

276. Id.

277. Id.

278. Id.

industry.279 Although the criticism of the extended copyright protection for older musical works

may have some clout, it overlooks Title II’s main purposes.280 Title II provides rights to copyright holders of older musical works because they are being listened to by consumers on streaming services and Satellite Radio stations and were not being compensated for it.281 In addition, those

who recorded that music are likely no longer sustaining an income from live performances of their

work.282 Without these protections, these works would potentially be used and commercially

exploited, and copyright holders of works prior to 1972 would have no way of obtaining royalties

for the use of their music.283

One last major complaint against the MMA is that it may be unfavorable for independent,

self-published, and unpublished songwriters.284 The International Council of Music Creators, a

non-profit organization that informs the public and protects the rights of songwriters and

composers,285 is the strongest contender of this argument against the MMA.286 First, it argues that

279. Copyright Timeline, supra note 24.

280. Stoltz, supra note 225.

281. Id.

282. House Leaders Introduce New “Music Modernization Act”, RIAA (April 10, 2018), https://www.riaa.com/house-leaders-introduce-new-music-modernization-act/.

283. Id.

284. Daniel Sanchez, 3 Major Problems with the Music Modernization Act, DIGITAL MUSIC NEWS (Feb. 7, 2018), https://www.digitalmusicnews.com/2018/02/27/music-modernization-act-major- problems/.

285. What We Do, INTERNATIONAL CONFEDERATION OF SOCIETIES OF AUTHORS AND COMPOSERS, http://www.cisac.org/What-We-Do (last visited Mar. 12, 2019); see also What CIAM Does, THE INTERNATIONAL COUNCIL OF MUSIC CREATORS Organization, http://www.ciamcreators.org/our- work/ (last visited Sept. 28, 2019).

286. Sanchez, supra note 284.

the Board set up by the MMA that will help transition into the full application of the Act, as well

as set up the MLC, is set to be a fourteen-person Board set up with ten music publishers and four

writers.287 The justified complaint is that the purpose of the MMA is to provide an efficient

licensing system for streaming services that allows songwriters and other copyright holders the

royalties they should be owed without all of the convoluted issues involved with prior copyright

legislation.288 However, if the Board that aims to set up the entirety of the MMA’s implementation

is outweighed by publisher’s interests, it may not have the proper effect.289 This criticism is valid

to some extent. There may be some arguments that come to show certain aspects of the

implementation of this Act favor people in the music industry other than songwriters. However,

this can only be true to a certain extent. Although the Board has the power to set up the MLC, only

legislatures have the power to change the black letter law of the recently enacted MMA.290 Second,

the Council of Music Creators argues that the fact that unclaimed royalties goes to publishers

disfavors self-published and unpublished writers because there is no way to claim royalties after

they have been collected from publishers.291 This argument may be founded in some truth, but it

will be a waiting game to see how the implementation of this Act goes for independent publishers and how they are really treated once the MMA is in full swing.292 Lastly, the organization criticizes

the MMA because it does not provide for “a grievance process for excluded writers and those who

287. Id.

288. Id.

289. Id.

290. H.R. REP. NO. 115-1551 at 19-22.

291. Sanchez, supra note 284.

292. Id.

receive unjust treatment.”293 This is ultimately an argument to protect independent songwriters who do not have the money to afford attorneys or to audit their publishers who may be receiving royalties on their behalf and keeping them from writers.294 This is a valid point, but on the same

token, there are always going to be certain power imbalances within the music industry to the

extent that songwriters may have contracts through publishing companies and those companies are

the entities working with the Copyright Office, now the MLC.295 In addition, the MMA provides

a new system for rate disputes in Title I, as described in previous sections, that will allow for claims

for royalties to be made through that process as well.296 The enactment of the MMA should

ultimately be implemented to provide easier access to royalties for songwriters and other copyright

holders and it seems Congress, by setting forth the MMA, aims to make that happen as efficiently

as possible.297

V. Conclusion

All in all, the MMA provides a practical and efficient approach to a solution for previous

the royalties they were owed under previous copyright law.298 Now, those individuals, including

those who produced music prior to 1972, will receive proper royalties under the MMA due to the

293. Id.

294. Id.

295. Richard Busch, I’m One of the Attorneys Suing Spotify. And Here’s Why the ‘Music Modernization Act’ Makes Little Sense, DIGITAL MUSIC NEWS (Jan. 19, 2018), https://www.digitalmusicnews.com/2018/01/19/spotify-music-modernization-act/.

296. H.R. REP. NO. 115-1551 at 12-13.

297. Id. at 1.

298. Coldeway, supra note 9.

creation of the MLC.299 Assuming the MLC is properly used by those in the music industry and

adequately paid for by digital music providers, these same companies will no longer be vulnerable to lawsuits that allege they are underpaying copyright owners.300 Although some may criticize this

prevention to file suit, it will ultimately provide an efficient and cohesive process for publishers,

songwriters, artists, mixers, sound engineers, and major organizations like PRO’s within the music

industry.301

Furthermore, although the MMA was enacted through traditional processes by Congress

and signed into law by President Trump, it is unique because it will be implemented, paid for, and

controlled by those in the music industry who understand it best.302 Although the number of

publishers outweighs the number of songwriters on the Board establishing the MLC, it will still be

an entire legislatively-created entity that is executed by the individuals who understand it

greatly.303 This arguably will provide a legally set up process that has everyone in the music

industry’s best interests at heart when it comes to licensing, new technologies, and copyright

protections.304 Likewise, the MLC will be implemented by the Board and funded by music

providers, who ultimately want this process to work as well because they are shielded from certain

liabilities with the enactment of this law.305 This is another way to self-check the process by

299. Id.

300. Id.

301. Id.

302. Overview, supra note 4.

303. Sanchez, supra note 284.

304. Coldeway, supra note 9.

305. Id.

making it the responsibility of streaming services and any other digital music providers that come

along to fund the process that ends up helping them stay out of future litigation.306

The creation of the MLC and the implementation of these processes not only applies to

recently created musical works, but now provides royalty rights for musical works being used that were created prior to 1972.307 This is an overall beneficial process because it keeps music providers

accountable for their commercial use of works that are older when they may have thought they no

longer had to worry about notifying the copyright holder of their use.308 This also goes hand in hand with the creation of the AMP Act, which furthers the policies of Title II by providing a legal process for producers and sound engineers to collect royalties for use of musical works, including works old enough under the new 1972 rule.309

The MMA is arguably, in terms of copyright legislation, the “most important piece of

legislation in a generation to help make sure songwriters in [the United States] are paid and are

paid a fair market value for their work.”310 The previous copyright law prevented artists and other

deserved. As a matter of policy, the MMA is beneficial for all in the music industry because it not

only allows individuals to be fairly compensated for others’ use of their work, but it will encourage

306. Id.

307. H.R. REP. NO. 115-1551 at 15.

308. Paul Resnikoff, War Breaks Out Over pre-1972 ‘Oldies’ Legislation – Will This Kill the MMA?, DIGITAL MUSIC NEWS (June 13, 2018), https://www.digitalmusicnews.com/2018/06/13/war-pre-1972-oldies-mma/.

309. Levine, supra note 257.

310. Flanagan, supra note 157.

protections.311 The fact that individuals will be compensated; a new Board will be created by

entities within the industry; a new Collective will be created to regulate and run the licensing

processes; and a new judicial system for ensuring fair market value of compensation for royalty

disputes will be established, strengthens the base of copyright policies to encourage creativity and

innovation throughout the United States.312 This is a step in the right direction and is a rare time where the law has finally caught up to a digital age that is only getting more advanced.

311. Copyright Timeline, supra note 24.

312. H.R. REP. NO. 115-1551 at 18-21.