@SESAC: Fact Sheet on SESAC’s Proposal to Improve the Music Modernization Act

[Editor Charlie sez:  What SESAC says about not endorsing the Mechanical Licensing Collective portion of the bill rings true based on other things we’ve heard.]

There has been a lot of misinformation and misrepresentation this week regarding SESAC. We’re setting the record straight so truthful answers can dispel unfortunate distortions about our position on MMA.

If SESAC thinks it has a better proposal than the MMA – why did it wait nearly 2 years and at the very end of the process to offer it?

This is not a last-minute effort. The legislative process is designed to be open, iterative and deliberative so legislation can be reviewed and improved with input from all stakeholders before it becomes law.

  • We have been an active part of this legislative process all along – supporting the broader AMP Act since it was introduced in July 2015 and the Classics Act since it was introduced in July 2017, which are now part of the Omnibus Music Modernization Act.
  • The single collective idea was introduced in the House on Dec. 21, 2017. SESAC actively stated in meetings as early as last winter that we never endorsed or supported the portion of the Bill that creates a national monopoly to administer online rights, despite continuing pressure to do so. Since then we have had dozens of meetings with Members of Congress and senior staff, and have had hundreds of communications with policy makers and others in an effort to improve the Bill, not derail it.

If SESAC thinks its proposal offers a middle ground, why doesn’t any other music organization support it?

The SESAC proposal is a compromise, accommodating all of the outcomes desired by the Bill’s stakeholders. Not to be confused with the Cruz Amendment, our proposal – clearly outlined below – enhances the Collective, maintains competition, and ultimately drives better royalty distributions to songwriters.

How does SESAC think its proposal can pass Congress when every major digital streaming company – Apple, Amazon, Google, Spotify and Pandora opposes it?

We believe our proposal, once clearly understood and evaluated on the facts, will earn the support of the majority, and that outstanding issues can be resolved through the legislative process. We continue to support the goals of the MMA and feel confident it will be enacted into law by the end of the year.

Here’s a summary of what was proposed:

  • SESAC’s proposal for the MMA promotes competition and accountability—that ultimately benefit songwriters, not insiders
  • The proposal authorizes independent Certified Administrators (CAs), chosen fairly based on their track record of delivering results for songwriters, to handle the administration and distribution of royalties
  • An honest, open marketplace – as proposed by SESAC – empowers choice of who can best handle royalty distribution.
  • SESAC’s proposal does not change the provisions that ensure digital giants like Amazon, Google and other DMPs are held accountable, and that royalties and copyrights are handled responsibly.
  • SESAC’s proposal strengthens the Collective by reinforcing it as the sole authority for:
    • filing blanket licenses
    • resolving song disputes
    • establishing and managing a comprehensive, definitive copyright database
    • administering and distributing unmatched (Blackbox) royalties

We respect all songwriters and wholeheartedly support the goals of the MMA. Read The Facts.

Our position on the MMA is that preserving competition will help songwriters. The only change in the compromise SESAC has offered is that the Private Certified Administrators must compete to be hired to process and distribute the royalties based on the database maintained by the Collective. It is our belief that this change ensures healthy free market competition, which will drive better and more accurate royalty distributions to songwriters. Additionally, the proposed amendment will not impact any other aspects of the law, the governance of the Collective, or payments to songwriters in any way. Here are the facts:

  • Songwriters keep all their seats.
  • It does not change the governance or structure of the Collective.
  • Digital music companies continue to pay for the Collective.
  • The Collective remains the administrator of unmatched (or Blackbox) royalties.
  • The Collective remains the single place for filing notices of blanket licenses.
  • The Collective remains the curator of the authoritative database for mechanical licensing.
  • The Collective remains the judge of conflicting claims under blanket licenses.

It is because of our dedication, loyalty and commitment to our songwriters that we stand by this compromise and continue to wholeheartedly support the goals of the Music Modernization Act.

 

@NSAIOfficial: Why Blackstone/HFA/SESAC Proposal Will Kill the Music Modernization Act

From the Nashville Songwriters site:

WHY BLACKSTONE/HFA/SESAC PROPOSAL WILL KILL
MUSIC MODERNIZATION ACT

PLEASE HELP AND DO YOUR PART – CONTACT SESAC TO HELP SAVE THE
MUSIC MODERNIZATION ACT! (CONTACT INFO BELOW)

The Music Modernization Act (MMA) provides a simple answer to a very complex problem in music licensing. One of the main reasons the streaming companies have agreed to a fair rate standard that will likely result in a royalty hike for songwriters is efficiency; so they won’t have to go to a large number of multiple sources to obtain mechanical licenses.  Instead they will get one blanket license from the new Music Licensing Collective (MLC) run by songwriters and music publishers.

Blackstone’s (parent company for SESAC who purchased The Harry Fox Agency in 2015) proposal would legally require each streaming service to hire another company to issue licenses, collect and distribute royalties IN ADDITION to the MLC.  This added step would be costly to songwriters, who will pay NOTHING to the MLC and collect 100% of their royalties, because we’ve already negotiated with streaming companies to get them to pay the admin costs!

This proposed amendment is an attempt to make sure The Harry Fox Agency keeps their current business by forcing the death of the MMA, or gets more business because their proposal FORCES streaming companies to hire an agency IN ADDITION to the MLC to issue and administrate mechanical licenses.

The Digital Media Association has said they will not support the Blackstone proposal, nor pay for it. Neither will music publishers, record companies, NSAI or anyone else who worked for years to create a bill that Blackstone is trying to kill at the very last minute.

Under the MMA, The Harry Fox Agency will have every opportunity to become a vendor and do business on behalf of the MLC if they prove they can do a good job, thus promoting efficiency and competition.  Instead, they want the government to REQUIRE and guarantee them business.

Blackstone owns both HFA and SESAC.  Concerned songwriters should CONTACT SESAC and ask them to withdraw this proposal and support the Music Modernization Act as drafted.  Call them at (615) 320-0055, email: licensing@sesac.com or tweet @SESAC to express your concern.  Tell Blackstone, SESAC, Harry Fox to work with us so together we can find a mutually agreeable solution and pass the most important songwriter legislation in decades.

[And a Tweet with guidance from the top music lawyer who is the driving force behind the legislation:]

https://mobile.twitter.com/dinalapolt/status/1022573867666104320