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House Votes to Modernize Music Compensation

By Steve Harvey. Passing by unanimous vote, a bill aiming to reform compensation for music licensing heads to the Senate.

Washington, DC (April 27, 2018)—The U.S. House of Representatives has passed H.R. 5447, better known as the Music Modernization Act, a bill that reforms compensation for music licensing, by a unanimous vote; it now heads to the Senate.

“Our industry made history yesterday,” commented Michael Huppe, president and CEO, SoundExchange, in an April 26 statement. “Never have we seen such consensus on an issue of such importance to music creators, and the bipartisan support that we witnessed in the House sends a clear message as music licensing reform moves to the Senate.”

The bill was introduced by co-sponsors Robert Goodlatte (R-VA) and Jerrold Nadler (D-NY). Goodlatte noted that “music is no longer written on piano rolls, and our laws shouldn’t be based on that technology either.” The Recording Academy, the RIAA, ASCAP, BMI, the American Association of Independent Music, the American Federation of Musicians and other industry groups threw their support behind the bill. Sirius XM and Music Choice are reportedly the only organizations offering any opposition to the MMA.

The bill offers benefits not just for artists and rights holders but also producers, engineers and mixers, by “formalizing SoundExchange’s long-time practice of honoring letters of direction from artists who opt to share royalties with other creative participants,” according to Huppe’s statement.

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The MMA also closes a loophole that denied federal copyright protection and royalty payments from digital services for the use of pre-1972 recordings. It additionally establishes a market-based standard rate for writers and artists—a willing buyer/willing seller model long advocated within the industry—and the creation of an organization, similar to SoundExchange, to track credits and distribute royalties.

According to Recording Academy president and CEO Neil Portnow, “Music creators compose the soundtrack to our lives. These creators deserve to be paid a fair wage for their work. The passage of the Music Modernization Act in the House of Representatives is a historic step forward for all music creators, ensuring that they are credited, paid, and shown the respect they deserve for the impact they have on our culture and daily life. We are honored that GRAMMYs on the Hill helped to pave the way for these long overdue updates.”

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The MMA now advances to the Senate, where three similar Senate bills are scheduled for Senate Judiciary Committee hearings in mid-May. Supporters of H.R. 5447 are reported as hoping that the Senate will simply take up and vote on the House bill rather than try to reconcile and combine all four pieces of proposed legislation.