The Music Modernization Act was signed into law in the United States in October 2018. This might be good news for engineers and producers, but potentially not-so-good news for independent songwriters. Audrey sat down with entertainment lawyer Elizabeth Russell of Russell Law to try and figure out what it all means.

In October 2018, the Music Modernization Act (MMA) was passed in the United States. Audrey saw a couple of super-brief articles about it at the time, but nothing that could answer the fundamental questions she had: What is the MMA? How does it affect us as engineers or producers? How does it affect our clients?

To answer these questions Audrey invited entertainment lawyer Elizabeth Russell of Russell Law to her studio for an interview to explore what the MMA in all about. You can listen to the full interview, which we have released as a Production Expert Podcast Extra Interview…

Audrey has also compiled a summary of the discussion. But first, a disclaimer: This article is our interpretation of the discussion between Audrey and Elizabeth. None of us on the team are lawyers and we are most definitely not YOUR lawyer. The only legal advice we have is for you if you need specific legal advice is to find a lawyer.

It’s All About Mechanical Licensing

When you hear a song on Spotify or Pandora, that song has two copyrights - one for the musical work (the melody and lyrics) and one for the sound recording (the audio you hear). An easy way to get those two straight is to think of a cover song. A cover song is a new sound recording of an already-distributed musical work. Since they’re using another artist’s melody and lyrics, the cover artist has to secure a mechanical license in order to (legally) distribute their cover. The cover song also has a new sound recording copyright, separate from the original song because it’s a different recording. While you can create a new sound recording of the musical work, you can’t use an existing sound recording without using the underlying musical work. Copyrighted work, whether it’s music or visual art, is entitled to certain rights, pictured below:

A musical work is entitled to rights 1, 2, 3, and 4 - the rights of reproduction, adaptation, distribution, and public performance. A sound recording is entitled to rights 1, 2, 3, and 6 - reproduction, adaptation, distribution, and digital audio transmission. All of that has been US copyright law since 1976, and hasn’t changed.

So What Has Changed As A Result of The Music Modernization Act?

What has changed is how music publishers collect royalties from digital streaming service providers such as iTunes, Spotify, Amazon, etc.

Formation Of A Collective

Title 1 of the MMA mandates a collective be created whose purpose is to collect royalties from streaming services and provide those royalties to the music publishers who then pay the songwriters.

The collective is required to be made up of 17 members: 14 voting members and 3 non-voting members. 10 of the 14 voting members are representatives of copyright holders aka. music publishers (in most cases, artists sign over their copyright to the publishers). 4 voting members are songwriters who have retained their own copyrights (aka. big artists with bargaining power). One non-voting member who represents streaming service providers and the one non-voting member who has to be a representative of a nationally recognized non-profit trade association whose primary focus is advocacy on behalf of songwriters in the US.

This effectively puts music publishers in the position of over-seeing the collection of royalties from digital service providers like Spotify.

A New Blanket License

Under the new law, any streaming service with subscribers can apply for a blanket license that allows them to distribute any music on their platforms that has been created in the United States, even if it has not been provided to them, as long as they comply with the collective’s rules and pay the fees.

If You’re A Songwriter, You Have To Be In The Songwriter Database

In order to be able to collect royalties as an independent songwriter, you need to make yourself known to the newly formed collective, a process that involves a lot of hoops to jump through. However, if a songwriter has not made themselves known, the collective still collects royalties on their behalf. The collective will hold the royalty fees for a songwriter for 3 years. If royalties are not claimed by a songwriter within that time, they will be distributed to other songwriters. Basically, the collective has to create a database of songwriters and you need to make sure you’re in it if you want your royalties.

The collective does serve another purpose, however flawed its methods when it comes to independent songwriters. It helps to ensure that royalties are even being collected when a streaming service plays a songwriter’s song. Spotify settled a $1.6 billion lawsuit with music publisher Wixen over unpaid royalties in December 2018. Hopefully, the MMA might prevent the need to sue in order to claim royalties in the future. That’s all outlined under Title 1 - The Musical Work Modernization Act.

Title 2 - Classics Protection And Access Act

Title 2 looks to address copyright protection for sound recordings that existed before sound recordings became eligible for copyright protection in the US. It gives copyright holders of pre-1972 recordings remedies to claim infringement, assuming you have written contracts in place.

Title 3 - Some Good News For Audio Engineers And Producers

The Allocation for Music Producers Act or Title 3 applies only to sound recordings, not musical works, and states that copyright ownership defaults to anyone who contributes creatively and above a certain threshold of originality to a work.

In other words, anyone who contributes creatively to the fixation of sound is a potential copyright owner, meaning they would be entitled to sound recording copyright rights 1, 2, 3, and 6. Here’s our handy diagram again so you don’t have to scroll…

We mentioned that musical works aren’t entitled to Right #6, so what is it? It covers the public performance of a sound recording by means of digital audio transmission (so not regular FCC regulated radio.)  It means that when a song you own the sound recording copyright to plays on Sirius XM, you can earn royalties. Right now, SoundExchange exists to help artists collect royalties for content distributed on satellite radio.

The best practice for you as an engineer going forward is to sort out copyright interest with all potential copyright owners before recording begins.

One part of the law that has changed is that copyright holders of sound recordings fixed before November, 1, 1995 can collect a cut of the royalties if they have a signed contract, of course.

Disclaimer And Acknowledgements

The only legal advice in this article is our recommendation to hire a lawyer to help you navigate the world of copyright.

Thank you to Elizabeth Russell from Russell Law for her help in explaining the Music Modernization Act and its implications. For a more detailed discussion of the MMA, listen to the full podcast extra interview or reach out to Elizabeth Russell directly, check out her website.