[It was only a matter of time–the controversial Music Modernization Act is producing new legal analysis showing it’s not what it’s cracked up to be!]
On December 21, 2017, the Music Modernization Act of 2017 (H.R. 4706) was introduced in the House of Representatives. The bill seeks to modernize the U.S. music licensing system by (1) creating a not-for-profit mechanical licensing and royalty collective to collect and distribute mechanical royalties from interactive streaming services, such as Spotify, Apple Music, Pandora, Google Play Music, Tidal, and others, (2) requiring Copyright Royalty Judges to establish rates and terms that would have been negotiated in the free market between a willing buyer and willing seller by examining economic, competitive and programming information, such as the rates that recording artists earn, and (3) changing the rate court procedure for ASCAP and BMI, the two largest performing rights organizations in the U.S., by randomly assigning federal court judges from Southern District of New York to each rate setting proceeding.
While many in the music industry welcome this bill, smaller publishers and musicians may be surprised to learn that several of the provisions in the Music Modernization Act may harm their interests.