It’s official! The Music Modernization Law (MMA) was signed into law on October 11th. The law is comprised of various pieces of complicated legislation all rolled into one. The law attempts to do many things to update old laws. It is complicated and confusing. Allow me to break it all down for you.
Music copyright law stems from legislation originally enacted in the early 1900s. This was before record players, radio, and 8-tracks—never alone digital platforms. The original law served to protect the copyright in sheet music. Clearly, it needed a huge overhaul.
Until the passage of this law, royalties were based on an archaic formula that paid artists and writers pennies on the dollar and had to be increased through legislation (which rarely occurred). Royalties were also determined by the same 3 judges. Now, the royalty rate is determined based on a “Willing Buyer/Willing Seller” model that takes fair market value into consideration instead of some “old timey” formula.
Additionally, the judges who determine royalty rates will have to rotate through the Southern District of New York, so each case can be reviewed with a fresh perspective. Also, the MMA provides federal copyright protection for pre-1972 music. 1972 is the “magical” year because this is when the federal law protecting music copyrights came into effect. Pre-1972 music only received copyright protection under state law, which was inconsistent and literally all over the map.
Who would disagree with all of this? Well, Sirius/XM took issue. As a basic premise for their objection, it is important to know that terrestrial radio receives a special exemption from paying artists music royalties. Satellite and digital platforms do not. This stems from a law passed in the 1940s.
The premise behind this is that radio provides free promotion to recording artists. Terrestrial gets people in seats at concerts and buying albums. Radio is local. Internet and satellite radio do not share this distinction. Also, internet and satellite radio did not exist in 1972 so there was concern at that time regarding payment to artists because only terrestrial radio existed, which receives the exemption from paying artists royalties. So, this means that Sirius/XM must pay royalties to artists. Since state law governed pre-1972 music, and some states did not provide pre-1972 music with copyright protection, satellite and digital platforms were not required to pay royalties for some of this music. Now, they must pay royalties to artists for pre-1972 music.
Overall, this law is a winner. Songwriters are getting paid fairly based on a modernized formula and artists are getting paid from satellite and digital providers for pre and post 1972 music. I think this is a law that everyone can get behind and feel good about this year.