This Fortnight in Music Royalties (02/03/18): We Might Finally See Sweeping Copyright Reform, The U.K. Music Biz Shows the U.S. How It’s Done

Rep. Goodlatte to Unveil Sweeping Music Copyright Reform Package Next Month (The Tennessean)

Just before Christmas, we were pondering what 2018 would bring in the world of copyright and royalty legislation.

Among the various copyright reforms proposed is the upcoming proposed “omnibus” legislation by Rep. Goodlatte (R-VA).

Next month will give us more details about Rep. Goodlatte’s reform package. What we do know is that the package would combine five bills (and possibly more). Here’s what combining them would look like:

MMA (Music Modernization Act)

The basic idea of the MMA is to pay higher royalties to songwriters and music publishers, while easing the licensing burdens and legal liabilities of the music streaming companies. Here’s what MMA would bring to Goodlatte’s package.

#1 – Rate courts will consider sound recording royalty rates paid to record labels and artists as a factor when rates are set for songwriters and publishers.

Plumb’s take: Good news for songwriters and publishers. Recent news of the Copyright Royalty Board increasing on demand streaming mechanical royalties is a good example of this already being implemented.

#2 – ASCAP and BMI would have their rate-setting disputes heard by any federal judge, instead of a single federal judge assigned for each PRO.

Plumb’s take: This will improve efficiency of common rate-setting proceedings, allow for quicker hearings and resolutions, and should help mitigate stalemates while waiting for hearings.

#3 – The Copyright Royalty Board would start considering a willing-buyer, willing-seller standard during rate-setting proceedings.

Plumb’s take: This concept helps attain a fair value for a song, with fees negotiated in the free market.

#4 – Create a new mechanical digital rights organization, run by music publishers but funded by streaming companies, to identify the copyright owners of songs that digital services want to license. Streaming companies would attain a blanket digital mechanical license and avoid future lawsuits. The new agency would be governed by a 10-member board consisting of ten music publishers and four songwriters.

Plumb’s take: This provision has many concerned. First adding another collection society within the U.S. licensing system could add confusion to an already confusing system. But the primary complaint is that the bill gives another “safe harbor” to digital streaming companies through immunity from copyright infringement lawsuits under the blanket license.

For more on the downsides of the MMA from the songwriter and independent creator’s perspective, see Billboard’s guest column this week titled, “The Music Modernization Act: We Can & Must Do Better.”

The CLASSICS Act

Plumb’s take: This piece of legislation would federalize sound recording copyrights before Feb. 15, 1972. That means requiring digital radio and streaming services to pay artists and record labels public performance royalties whenever those pre-1972 recordings are broadcast. All I can say is, it’s about time!

The AMP Act

Plumb’s take: The AMP Act would amend copyright law to pay a portion of sound recording royalties to the producers, mixing engineers and sound engineers who were behind the creative process of producing sound recordings. Though it is industry practice to pay the producers some royalties, this would codify into copyright law and recognize the recording engineer’s important role.

Register of Copyrights Selection and Accountability Act

Plumb’s take: This would place the power to appoint the Register of Copyrights under the office of the President, with the advice and consent of the Senate (as opposed to the Library of Congress where it currently resides). This could give copyright owners and creators more consistent leadership in the Copyright Office, as well as more of a direct line to the ear of the President.

The CASE Act

Plumb’s take: Rolling this into Goodlatte’s reform package would create a small claims court for copyright royalty disputes under $15,000. These are common, but independents can’t afford court and attorney’s fees. Due to the high cost of chasing down these small claims, it hasn’t been worth the effort for most. If implemented well, a small claims court like this could fill a need and make a difference for smaller and independent royalty payees.

The momentum for copyright reform is stronger and more likely than it has been in a long time. Goodlatte’s bill consolidation here is something that could likely pass, regardless of the objections from either side. [READ MORE]

And now for this week’s other headlines:

• The Major Labels’ Revenues Grew By $1Billion in 2017. But Who Had The Biggest Year? (Music Business Worldwide)
• Pandora Reports $395M in Q4 2017 Earnings, 25% Subscriber Growth (Billboard)
• 28 Years After His Death, a Composer Gets a Publishing Deal (NY Times)
• Frank Ocean Sues Producer Over Authorship of ‘Blonde’ Songs (Variety)