What’s New in Music Licensing?
House Judiciary Committee Subcommittee Holds Field Hearing on Five-Year Anniversary of The Music Modernization Act
On June 27, Members of Congress gathered for a field hearing in Nashville to examine the impact of the Music Modernization Act (MMA), five years after it was signed into law in 2018. The hearing featured a variety of industry voices and explored a range of music licensing issues.
While the MMA does not regulate public performance rights for music works, the MIC Coalition used the opportunity to submit a letter for the records that encourages Congress to consider pro-small business policies that make it easier for venues to license public performance rights from PROs.
We appreciate the opportunity to provide input as the Subcommittee marks the five-year anniversary of the enactment of the Music Modernization Act (MMA). While the MIC Coalition and some of our members were involved in the discussions leading up to the MMA, the Act did not address the problems licensees represented by the MIC Coalition face when licensing the public performance of musical works. These problems pose challenges for all licensees, but particularly for the small business owners attempting to lawfully play music in their establishments. As the Subcommittee takes stock of things still to be done to improve music licensing, we hope that you will focus on these challenges.
Both Rep. Chairman Darrell Issa and Rep. Scott Fitzgerald asked witnesses for their thoughts on bringing transparency to performance rights:
Question from Rep. Fitzgerald: I continue to believe that more can be done, and I believe others do as well, to improve data throughout the industry, including public performance rights. My understanding is that mechanical rights data is nearly identical to performance rights data. Do you think having PRO affiliation data included in the Mechanical Licensing Collective (MLC) would help Big Machine have access to this data?
Michael Molinar, General Manager, Big Machine Music: Let’s touch on what the MLC is doing right. This database is heading toward being the cleanest database that exists. The complicated landscape of these royalties, especially the decision that I wasn’t around for to split mechanical royalties into a performance and a mechanical makes things more complicated. I do think we are on the right track because of the way publishers can interact with their own data and see what has been played. We have transparency and the ability to act on it, particularly when, in the past, we had different third-party vendors representing each streaming service and therefore had no transparency. I can’t speak to the function of PROs since, by statute, the MLC isn’t allowed to collect performance royalties, so we are concentrating on getting the data right for our purposes under the statute.
Question from Rep. Fitzgerald: At times, the MLC has weighed in on the different interpretations of the statutes. Rather than the MLC weighing in, have you asked the Copyright Office to weigh in with their views?
Kris Ahrend, CEO, Mechanical Licensing Collective: The termination issue was a great example — said the issue was not addressed by the MMA. Asked the Copyright Office to weigh in. We welcome their guidance. We don’t decide anything other than operational policies.
Question from Rep. Fitzgerald: Can you talk about what the MMA did or did not do regarding public performance rights and what remains to be done to keep music affordable for consumers?
Garrett Levin, President & CEO, Digital Media Association: The MMA did very little in the public performance space; some adjustments to how a dispute can play out in the rate courts that govern the ASCAP and BMI consent decrees, as well as some notice to Congress should DOJ decide to do away with the consent decrees. It is one of the many rights that DiMA members must license to operate.
The U.S. is unique in the number of PROs (up to 6 now) which is not the way it operates in the rest of the world. Anywhere in the U.S. that publicly performs music from bars to restaurants to DiMA’s members, needs licenses from the PROs. So certainly a marketplace where it’s important to ensure that it is functioning properly. I know that Reps. Fitzgerald, Issa, and Ross sent a letter last year to the US Copyright about potential improvements on transparency in this space. We talk a lot about data, it comes up all the time in the music industry; licensees want to know what they are licensing, and every rightsholder deserves to get their money efficiently and effectively. So finding improvements to make licensing more efficient through improved data is a real area of shared undertaking between licensees and PROs.
Question from Rep. Issa: In your testimony, you noted that the PROs are outside of this original legislation. Do you believe that Congress should take action to bring them underneath this act for a benefit, either compulsory or an opt-in?
Abby North, President, North Music Group; Co-Founder, Unchained Melody Publishing: That is such a difficult question. Rep Fitzgerald had asked whether PRO data should be included in the MLC. Personally, I think yes. Knowing the PRO of the songwriter or publisher helps us disambiguate data. However, the PROs function pretty well, and I don’t think they need additional regulation, and I’d like to keep them out of it.
A recording of the field hearing is available on YouTube.
***
