The Music Modernization Act Misses the Mark
By Phil Galdston & David Wolfert
Three pieces of legislation that aim to update the ways that royalties are paid to songwriters and artists — the Music Modernization Act, the CLASSICS Act and the AMP Act — are going before Congress later this year. In a guest column published by Variety last week, National Music Publishers’ Association president/CEO David Israelite and Recording Industry Association of America president Mitch Glazier argued for combining the three acts into a single piece of legislation. In this response, songwriters/publishers Phil Galdston and David Wolfert take issue with several points in the Music Modernization Act.
The Music Modernization Act (“MMA”) is an important piece of copyright legislation with the potential to benefit the music community, most important, songwriters and composers, who may finally receive just compensation for the millions of streams of their work fans enjoy and on which digital music services base their businesses. But the current draft fails to deliver on that promise.
As the MMA moves closer to a vote in Congress, those of us who have refrained from joining the cheering squad have had time to study its details and likely long-term consequences. The more we’ve looked at it, the more concerned we’ve become. While there are a good number of serious issues with the bill, its fundamental flaw is that it completely fails to accomplish one of its most important goals: ensure that all the writers whose music is played on digital music services get paid.
The idea sounds simple enough. The digital music services have agreed to pay for every stream of every song. There are ways to determine whose song is whose. The rate is all set. So what’s the problem?
The problem is that the major music publishers have seized this opportunity to attempt to tighten their tenuous grip on the music publishing business, using the MMA to install themselves as the gatekeeper for tens of millions of dollars in unclaimed royalties from digital music services, and, in effect appointing themselves as the sole judge and jury about who is entitled to be paid, how they will be paid, and even if they will be paid.
The publishers have gone so far as to claim that if the writer of a song doesn’t file a proper claim within 36 months of performance, 100% of the royalties from those streams will instead be paid to the top publishers (and some of their biggest writers) via the world’s largest “black box” of royalties. Really?
The music business is going through an unprecedented period of growth, fragmentation, and democratization. A new generation of writers is looking for new ways to get their music to market, and new business paradigms based on transparency and technology are being developed with and for them. Big music publishers still control a large portion of the business, but a global world of independent writers and publishers is beginning to challenge their dominance.
We won’t go into all the details of the MMA (it’s more than 100 pages long) except to say that the complicated organizational structure it establishes pretty much ensures that a big pile of money will end up in the black box, destined for distribution to the major publishers based on their market share. It is highly unlikely that the tens of thousands of independent self-published and unpublished writers whose music is performed on Spotify and other digital music services will ever get their fair share.
Proponents of the bill claim to have the support of the tens of thousands of music creators. We strongly believe that few, if any, of those writers understood the details of the bill or its implications when they were asked for support. (Indeed, the bill had not even been made public when its proponents began promoting online petitions in support, nor was its text included or a link to it provided.) And with all due respect to the songwriter organizations that were involved in the negotiations of this bill, their members do not represent the worldwide community of unpaid independent music creators for whom the MMA is supposed to be a solution.
MusicAnswers was one of many groups that offered its support for the legislative process and initial, conditional support for the bill, expecting (and having received assurances) that our serious, repeatedly-stated concerns about governance, transparency, and royalty distribution would be addressed. But it appears that the architects of the MMA do not intend to make meaningful changes—certainly not by equally sharing power with writers—or sincere efforts to determine to whom all that money in the world’s largest black box belongs.
There are many provisions in the MMA that can and should be corrected, but the easiest one may be this: distributions from the black box should only be made to writers and publishers who file legitimate claims for previously unidentified or mis-identified tracks. That would take the politics out of distribution, create a real incentive for writers and small publishers to file claims, and ensure that the legislation fulfills one of its primary goals. While we imagine that there are other possible solutions, this one seems simple and fair enough to win widespread support
It’s important to note that this specific idea—and the remediation of virtually every other point we and other critics have raised—has nothing to do with the digital music services, and, therefore, doesn’t in any way jeopardize the chances of the bill’s success. Unless, of course, the major publishers don’t want to give up the chance to get something for nothing.