The Music Modernization Act (MMA) Explained In Less Than 2 Minutes

What Is The Music Modernization Act (MMA)

The Music Modernization Act was made law in 2018, and although implementation may be delayed, there is no doubt that this will change how creators get paid as well as the rates of compensation.

I’m sure more money in your pocket as a creator wouldn’t be a bad thing considering how much larger corporations seem to be profiting from the music industry.

As we are all well aware, technology has changed the landscape of the music industry in more ways than one.

Specifically, the impact of digital service providers (i.e., Spotify, Google, Apple, Amazon & Pandora) has had both positive and negative effects on the music industry.

However, one thing that has always remained a constant topic of discussion is the low compensation received by musicians, especially from digital service providers

The Impact To Artists

While there are a couple of sides to the equation, it is important to revisit our two parts of a song discussion.

Remember that a song consists of the Master Recording and the Composition. How an artist, songwriter, producer, publisher, or record label gets paid comes down to what part of the song they own.

Historically, higher profits were granted to the artist or record label based on ownership of the master recording. Sometimes receiving five times the amount for the master recording as music publishers, producers and songwriters were receiving for the composition.

As you can see, this left producers, songwriters, and music publishers reaching for scraps, as they felt like they were getting an unfair deal, which is what brought about the need for The MMA.

As referenced by Copyright.Gov, The Music Modernization Act updates the music licensing landscape to better facilitate the legal licensing of music by digital services. It also provides specific protections (and exceptions to those protections) to pre-1972 sound recordings and addresses the distribution of producer royalties.

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Breakdown of The MMA

The Music Modernization Act has three main sections:

Title I – The Music Licensing Modernization Act creates a blanket license for interactive streaming services. It also establishes a mechanical licensing collective (MLC) as well as a digital licensee coordinator (DLC), making it easier for services to obtain licenses and for creators to collect royalties.

Title II – The Classics Protection and Access Act, which created federal rights for owners of sound recordings made before February 15, 1972.

Title III – The Allocation for Music Producers Act (AMP Act), which creates a path to collect certain royalties for music producers, mixers, and sound engineers.

The common denominator here is that creators feel they are underpaid while big business rakes in the profits. However, these businesses (record labels and the like) have vested interests in the digital service providers because they directly impact their profits. So, of course, they want to protect the goose laying their golden eggs.

The Digital Service Providers, for one, wanted to simplify the way they license music and payout royalties, which had proven to be a challenge and costing them money in legal battles.

The goal of the bill was to address the issues and concerns of all parties involved. These issues revolved around:

• Raising royalty rates for songwriters and publishers,
• Fixing licensing issues surrounding music being used on digital service providers,
• Ensuring royalties were being paid and to the right people,
• Solving admin issues with notices of intent and reducing the bottleneck attributed to these requests,
• Proper compensation for music producers, engineers, mixers, and
• Business’ wanting to ensure that royalty increases didn’t drastically impact their bottom line.

Future of The MMA

In a nutshell, The MMA is here to help music owners and users. The rules that were being followed previously were past their expiry date and lacked consideration for the new realities of the music industry.

When you look at who’s involved in a song and the multiple ways the pie tends to be split, ensuring accuracy and fairness through compensation can be complicated. A lot of the ownness is on the individual to protect themselves. The MMA looks to be a stepping stone to help reward creators properly, giving them more of what they rightly deserve.

The MMA will mirror what Performance Rights Organizations have accomplished where the collection of performance royalties are concerned. The MMA is poised to establish a new form of society called the Mechanical Licensing Collective (MLC), which would provide blanket licenses for digital service providers.

This would work to increase compensation rates, protect all parties involved from licensing issues, provide greater accuracy in royalty payments, and limit the bottleneck from notice of intent submissions.

Wrapping It Up

While there is still a lot to be ironed out, You as the artist should be aware of how this bill affects you, the importance of your copyrights, knowing what you own, and understanding the details of your agreements.

This won’t make you rich per se, but the bill is a step in the right direction to improving your position as a musician.

In the comments below, let us know your thoughts on The Music Modernization Act (MMA).

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