I have a feeling I’m about to wander off the reservation here.
I say this because what I’m about to propose is essentially a modification of a potential legislative proposal that rumor has it the NMPA is floating. That proposal seems to be generating some negative backlash in songwriter/publisher community (whether it deserves it or not.) Also, it will at first seem to go against some of my long held principles on market pricing, “orphan works” type proposals and the establishment of any further federal copyright exemptions and safe harbors. So hear me out while I make the case for a win-win compromise.
What is it that digital services want?
Digital services have two major issues with the current law and regulations on “streaming mechanicals,” those small royalties paid to songwriters and publishers on each stream of a song.
Interactive streaming services get a federal “compulsory license” to use any songwriter’s work on their services as long as they follow a relatively simple procedure (with some exclusions). A pre-condition to services using this protocol is that the law requires them to send a “Notice of Intent” (NOI) to owner or agent for owner of the song. The NOI is intended to make sure the songwriter knows their song is being used, and the service must demonstrate that it knows who to pay.
Implicit in the logic of the law and the related regulations is that the federal government did not want the interactive streaming services building up a black box of “unmatched” songwriter royalties. Nor does the law necessarily require that the streaming services would have access to every single song in existence.
However, commercial pressures, coddling from music distributors and lax enforcement of songwriters’ rights (until the recent class action lawsuits), has encouraged these services to use as many songs as possible with full knowledge that they didn’t have licenses for every song and were thus committing mass copyright infringement. Streaming services literally very likely have billions of dollars in willful copyright infringement liabilities on their books whether or not they acknowledge the liability on their books or to their shareholders.