The Music Modernization Act (MMA), a collection of changes and updates to laws governing copyright and other music business-related practices, is tantalizingly close to becoming law. Final passage would be a great step forward for recording artists, songwriters, producers, and and engineers.
The US Department of Justice (DOJ) formally announced last Thursday that it would not make any changes to the language in the consent decrees that govern the operations of ASCAP (the American Society of Composers, Authors and Publishers) and BMI (Broadcast Music, Inc.), the two largest US performing rights organizations (PROs). This ends a two-year DOJ investigation into public performance licensing that took place at the request of the two PROs.
Details of the settlement reached in the case concerning ownership of the song “Happy Birthday To You” were released today with a filing in United States District Court. In the settlement, originally announced in December but which the court has only now been asked to approve, Warner/Chappell agreed to pay $14 million to licensors as well as $4.6 million in legal fees for the other parties in the suit.
The case centered on whether Warner/Chappell ever actually owned the lyrics to the song it acquired during its purchase of Clayton F. Summy Co., in 1988. Since then, it’s been estimated that the song generated about $2 million in yearly income through licensing.
“Happy Birthday To You” was written by Patty Smith Hill and her sister Mildred J. Hill in 1893 and will now officially become public domain, free for anyone to use without further permission.
In a decision that undoes years of licensing agreements, the United States District Court in California reached a decision on Tuesday in the case Rupa Marya, et. al. v. Warner/ Chappell Music, Inc., ruling that the classic song “Happy Birthday To You” is not owned by publisher Warner/Chappell.
Earlier this week, a judgment was finally reached in the long-running dispute between Stephanie Lenz and Universal Music Group (Lenz v. Universal [PDF]) known as the "dancing baby" lawsuit. The decision represents a very important ruling protecting the concept of "fair use" and helps to eliminate a means of censorship on the internet.
There was very exciting news for creators this week as on Monday, Representatives Jerrold Nadler (D-NY) and Marsha Blackburn (R-TN) introduced the Fair Play Fair Pay Act of 2015. This bill proposes a number of updates to existing legislation that would serve to correct antiquated provisions in the copyright act and bring modernization and fairness to the way performing artists and songwriters are paid.
Most importantly, the bill proposes to finally grant a public performance right for terrestrial radio broadcasts and to ensure that royalty payments are made in connection with streaming of recordings made prior to February 15, 1972.
The United States does not currently grant a public performance right for radio broadcasts. (A surprising fact when you consider that the other nations that don't are China, Iran and North Korea.) This means that when a song is played on terrestrial radio, neither the singer nor the record company get paid (while the songwriter does). The Fair Play Fair Pay Act would grant that right, allowing artists to make money when their performances are broadcast.
A side benefit of this could also mean that US performers would become eligible to collect public performance royalties from foreign broadcasts. Currently they do not collect these “neighboring rights”, as foreign governments don’t allow their PROs to pay on broadcasts of US recordings, their rationale being, “why pay US performers if the US doesn't pay ours?” (This would also require the US signing The Rome Convention, but passage of the Fair Play Fair Pay Act would certainly pave the way.)
Granting a public performance right would finally end a long-standing record business tradition originating from the idea that radio equals free promotion and that performers are ultimately paid through increased record sales. While that may have been true once, as consumers transition from purchasing music to streaming it, that free promotion will no longer mean increased revenue.
Under current law, internet and satellite radio stations are paying a digital public performance royalty. By ensuring terrestrial broadcasters make these payments too, the playing field for terrestrial radio stations and internet and satellite broadcasters will leveled, allowing greater competition and standardization of rates and payments.
To answer critics that suggest the bill will make it difficult for radio stations to make money, it attempts to mitigate the expense by putting in place caps on their royalty payments. Stations with less than one million dollars in annual revenue would not pay more than $500 per year. For non-commercial stations that amount would be $100 per year, and religious stations or incidental uses of music would need no royalty payment at all.
The other very important aspect of the bill is implementing royalty payments for so-called “pre-1972” recordings. These recordings are not covered by federal law, and as a result, some digital broadcasters have not been paying any royalties when the recordings are streamed. Several lawsuits are working their way through the courts on this issue, with an important decision rendered against SiriusXM, and a similar lawsuit pending against Pandora, but it remains to be seen as to what the final outcome will be.
While the Register of Copyright’s February 2015 report entitled Copyright and the Music Marketplace [PDF] suggested that the law be changed such that pre-1972 recordings receive protection under federal law, Nadler's and Blackburn's bill would at least insure that uses of those recordings will generate the same royalty payments, even if they don’t get full copyright protection.
A couple of other changes proposed include provisions protecting songwriters and publishers from companies trying to lower rates, as well as streamlining the process of paying producer royalties, and allowing artists to receive direct royalty payments despite how their labels may wish to handle them.
In all, this is a very important step in protecting the rights of performing artists. It will not face easy passage however, as the National Association of Broadcasters will undoubtedly fight it, expressing their resistance to it before the bill was even announced.