The Music Modernization Act (“MMA”) was signed into law on October 28, 2018. This law overhauled parts of copyright legislation to better support songwriters and artists by updating royalty and licensing rules. In a nutshell, the signing of the MMA modernized an archaic piece of legislation and promptly moved it into the 21st century.
The MMA was actually an omnibus bill meaning there are several components addressing both sound recording and publishing rights; The Musical Works Modernization Act, The Classics Protections Act and the Allocation for Music Producers Act.
Title I - The Musical Works Modernization Act
Created a blanket license for interactive streaming services and established a mechanical licensing collective making it easier for music services to obtain licenses and for creators to collect royalties.
This legislation directly impacts the publishing royalties, specifically the mechanical royalty generated when a composition is streamed on a digital services such as Spotify, Apple Music, Amazon Music or Tidal (DSPs).
Ultimately, this creates a new collection society, “The MLC”, who will be responsible for issuing blanket licenses to digital services, collecting royalties from those services and distributing those royalties to songwriters, composers, lyricists, publishers and publishing administrators. Furthermore, the MLC will create a publicly accessible database containing information relating to musical works and their owners.
This centralises the digital mechanical licensing process making the collection of royalties much more efficient for music creators. It also creates a more efficient way for music users to gain access to music.
Title II - The Classics Protection and Access Act
Created federal rights for owners of sound recordings made before February 15, 1972.
This applies to the sound recording copyright and is not a publishing subject. When you record a song you have written today, you have created two copyrights; the sound recording and the composition. As a result, you receive ownership of two distinct copyrights which are governed by federal law. However, until the Classic Protections Act was passed, recordings made before February 15 1972 were only governed by state law. This caused much uncertainty amongst artists, labels and distributors as disputes arose contesting the scope of state law rights when sound recordings are used on digital music services. The passing of the Classics Protections Act ended that uncertainty.
Title III - The Allocation for Music Producers Act (AMP Act)
Created a path to collect certain royalties for music producers, mixers and sound engineers.
Again, this applies to the sound recording copyright and is not a publishing royalty. The AMP Act makes it much easier for producers and engineers to collect royalties derived from satellite and online radio for recordings they have worked on. Historically, should an interested party want to collect any pre negotiated royalties owed to them, the party would have to apply through the artist which is typically a very convoluted process. Engineers can now negotiate a royalty with the artist and simply provide a Letter of Direction to Sound Exchange in order to receive those royalties direct as opposed to from the artist.