The legislation aims to revamp existing laws so musicians and labels are better compensated by streaming platforms.
President Donald Trump signed the United States Music Modernization Act into law today.
The act, which passed unanimously through the House and Senate, aims to update antiquated US copyright and licensing laws for the streaming era.
Specifically, its goal is to simplify the process of licensing music so that rights holders are more fairly compensated when their music is streamed online. It will iron out the most complicated part of the process—figuring out who the rights holders are—by creating a single licensing database called the Mechanical Licensing Collective. The MLC will ensure that payouts end up with the correct artists and labels.
It also includes a piece of legislation called the Allocation for Music Producers Act, which specifically aims to get producers and engineers better royalty payouts from satellite and online radio (it’s the first time producers have been mentioned in US copyright law).
“You like this legislation or do you hate it?” Trump reportedly asked his invited guest Kid Rock during the signing ceremony this afternoon. “I like it,” replied Kid Rock.
New legislation that calls for major updates to the United States’ music copyright and licensing laws passed the House of Representatives yesterday by unanimous vote.
The Music Modernization Act, also known as House Resolution 5477, bundles together a handful of bills that, as a key sponsor in the House put it, “brings early 20th-century music laws for the analog era into the 21st-century digital era.”
One big change is the creation of a blanket mechanical license, which digital providers can obtain as protection against copyright infringement lawsuits, and a new agency whose mission will be to track credits on streaming and other digital services and collect and distribute royalties. The agency would be similar to SoundExchange, a non-profit that is currently the only digital royalties distribution entity authorized by Congress. HR 5477’s other measures include the development of a system of market-based royalty rate standards, new protections for recordings made before 1972 and the addition of royalties for producers and engineers.
Left unaddressed are performer payments for over-the-air radio play—Inside Radio says the National Association of Broadcasters and the music industry aim to iron out a compromise on that front without a government mandate.
Industry supporters for HR 5477 include the Recording Academy, RIAA, ASCAP and BMI, along with the Digital Media Association, which represents the likes of Apple, Amazon, Google, YouTube and Spotify.
The bill passed the House with an expedited 415-0 vote—a rare display of bipartisan cooperation in US government that suggests it’ll make it through the Senate and onto the president’s desk. The Senate’s Judiciary Committee plans to begin its own deliberations in mid-May.