In a striking contrast with recent partisan wrangling in Washington, both political parties in both houses of Congress have come together to pass the Music Modernization Act, a thoroughgoing reform of the way that artists and songwriters are paid for music on digital streaming services.
Over the past few weeks, both the House of Representatives and the Senate passed the bill unanimously, and today President Trump signed the bill into law. Though it looked simple at the end, there had been several years of back and forth between tech companies and performance rights organizations ironing out differences. Artists and writers have been outraged by the dearth of royalty income coming from streaming companies like Pandora, Spotify, and Apple Music who made their songs available to members on demand.
Officially titled the Orrin G. Hatch-Bob Goodlatte Music Modernization Act of 2018, the new law establishes a new federal agency to administer royalties from streaming services, alleviating the massive processing of track plays, and saving the streamers money in the process. In return these companies must purchase a blanket license and make regular payments based on music played. It is to be seen how well the blanket licenses compensate artists for actual plays, as bluegrass writers and performers had long complained that other blanket license income was simply distributed to top selling artists instead of to the responsible parties.
The law also closes a loophole that everyone had agreed needed to be stitched up, where recordings made prior to 1972 were exempted from some royalties accruing.
A new standard is also included in the legislation to set royalty rates based on free market value, which music industry folks feel certain will result in increased payments to songwriters.
Again in a rare moment of cohesion, all parties involved in this issue seem to be delighted with the way the law turned out, with streaming companies assuring their subscribers that they don’t anticipate any fee increases.
These various provisions of the Music Modernization Act will go into effect in January 1, 2020.
