March 14, 2018

Hon. Robert Goodlatte
Hon. Jerrold Nadler
House Judiciary Committe
House of Representatives
Washington, D.C.

Dear Chairman Goodlatte and Ranking Member Nadler,

We write to you as founders and directors of MusicAnswers, a non-profit grassroots organization now supported by more than 3,400 independent music creators across America, to express our profound concerns about the Music Modernization Act (“MMA”). We believe the current draft of the MMA completely fails in one of its primary goals: to ensure that all music creators, many of whom are independent and self-published or unpublished, are paid fairly for the use of their music by digital music services.

Instead, the MMA is being used by major music corporations to strengthen their grip over an industry undergoing an unprecedented period of fragmentation, disruption, and growth.  For the Music Modernization Act to live up to its name, it must truly embrace a modern approach to streaming royalties.

A key problem the MMA purports to solve is the disposition of royalties for tens of millions of unidentified works performed by digital music services. These royalties are generally not the property of established music publishers or their writers, entities with the resources and administrative expertise to ensure they are paid for their performances. They are, instead, primarily the property of tens of thousands of writers from around the world who have chosen to bypass the established music publishing paradigms and explore new ways to get their music to market.

So it is astonishing that the “Collective,” the entity designated by the MMA to take control over the entire process of licensing these works and administering the payment of royalties, will be dominated and controlled by major music publishers — the very businesses eschewed by many of the writers concerned. This would create a significant conflict of interest that would compromise the integrity of the MMA.

We draw your attention to the following:

1. The Collective established by the MMA will be controlled by the major music publishers, with a Board of Directors made up of ten publishers and four writers. There is absolutely no justification for this inequity. The Board overseeing the MMA should have equal numbers of writers and publishers, including some guaranteed representation for self-published or unpublished writers and small, independent publishers. Moreover, members of that Board should be selected by their peers, not by the major publishers or their trade associations (as has been suggested by the CEO of the publishers’ trade association.)

2. The MMA will create the world’s largest “black box” of unclaimed royalties, amounting to tens of millions of dollars. The process enshrined in the bill for the distribution of this money funnels it directly into the pockets of major publishers, while simultaneously creating a strong disincentive for the Collective to identify the proper owners, as this would only diminish their share of the black box. The distribution of any unclaimed money from digital music services must be accomplished in a way that ensures that the writers entitled to this money, and only those writers, share in this pool of money.

3. The MMA offers indemnity to digital music services on behalf of hundreds of thousands of music creators, including independent writers who have not exercised their rights under the copyright law to seek damages for prior performances and who were not consulted and did not agree to this provision. It is unconscionable that the indemnity is, in effect, being proffered by entities that have already settled their past claims. Distribution of the unclaimed funds only to writers and publishers with legitimate claims could help to alleviate this concern. In addition, a portion of unclaimed funds could be used to mount a campaign to educate independent writers about the process and benefits of filing their claims.

Absent these kinds of modifications, none of which would imperil the fragile multilateral agreement between the digital music services, performing rights organizations, songwriter groups, and music publishers, this legislation will not benefit the songwriters whose rights and royalties you seek to protect. In fact, the MMA as currently drafted establishes a framework likely to deprive legitimate songwriters of their rights and royalties for the next several decades.

We note that proponents of the bill claim to have the support of the tens of thousands of music creators. We strongly believe that few, if any, of those writers understood the details of the bill or its implications when they were asked for support. (Indeed, the bill had not even been made public when its proponents began promoting online petitions in support, nor was its text included or a link to it provided.) And with all due respect to the songwriter organizations that were involved in the negotiations of this bill, their members do not represent the worldwide community of independent music creators for whom the MMA is supposed to be a solution.

On behalf of those independent music creators, many of whom we count as friends and colleagues, we ask you to be cognizant of the forces that are at work behind the scenes and the reasons for their actions, and to carefully consider the long-term consequences of these legislative efforts.

Sincerely,

Phil Galdston David Wolfert

cc: Member of the Committee on the Judiciary, U.S. House of Representatives
cc: Hon. Senators Alexander, Coons, Feinstein, Hatch, Leahy, and Schumer