A Message from ASCAP CEO Beth Matthews on the Music Modernization Act of 2017

December 21, 2017

Dear ASCAP member:

This has been an important week for our community. Two days ago, songwriters achieved a victory in the Second Circuit Court of Appeals which affirmed that the right of public performance allows for the fractional licensing of musical works, and the consent decrees do not prohibit that right. In more good news, earlier today, US Reps. Doug Collins (R-GA) and Hakeem Jeffries (D-NY) introduced HR 4706, the Music Modernization Act of 2017. Original cosponsors include Karen Bass (D-CA), Diane Black (R-TN), Marsha Blackburn (R-TN), Steve Cohen (D-TN), Jim Cooper (D-TN), Kevin Cramer (R-ND), Joe Crowley (D-NY), Chuck Fleischmann (R-TN), Ted Lieu (D-CA) and Pete Sessions (R-TX). This bipartisan music reform bill includes provisions that address some of our specific challenges. These include:

  • Rate court reform: replacing a single rate court judge for each PRO with different judges randomly assigned to each rate-setting proceeding (the “wheel” system); and
  • Removal of Section 114(i) of the Copyright Act: allowing a rate court to consider all relevant evidence when determining songwriter compensation – including the rates that recording artists earn – an ability that is currently prohibited by law.

As you know, ASCAP has long advocated for a more flexible licensing framework that can adapt to the realities of the modern music marketplace. For too long, songwriters have had to work within an outdated system that over-regulates and undervalues their work. By introducing these changes, we hope the bill will ultimately result in compensation for our members that reflects the true value of your music.

“For too long, songwriters have had to work within an outdated system that over-regulates and undervalues their music. ASCAP and our members have long advocated for a more flexible framework that can adapt to the realities of the modern music marketplace. We thank Congressmen Collins and Jeffries for introducing this legislation which is result of compromise between stakeholders from the music and tech sectors. We are glad to see provisions that address rate court reforms, which should ultimately result in compensation for our members that reflects the true value of their music. We will continue to push for reforms that can help move the entire music industry forward.” - ASCAP CEO Beth Matthews


The Music Modernization Act of 2017 also includes provisions to reform Section 115 of the Copyright Act to create a single licensing entity that will administer the mechanical reproduction rights for all digital uses of musical compositions like those used in interactive streaming models. This replaces the “bulk NOI” process that often failed to result in payments to songwriters and music publishers with a system that will enable digital music services to find the owners of the music they use.

It is important to note that this is just the first step in the legislative process. The Music Modernization Act of 2017 represents months of compromise and collaboration between stakeholders from the music and tech sectors. In the coming months, the Music Modernization Act will begin to make its way through the committee process with the goal that it will eventually be brought to the House and Senate floors for a vote and passed.

We will keep you updated on this effort as we continue to push for reforms that can help move the entire music industry forward.

Sincerely,

Beth Matthews
ASCAP CEO

Joint statement from NMPA President & CEO David Israelite, ASCAP CEO Elizabeth Matthews, BMI President & CEO Mike O’Neill, NSAI President Steve Bogard and SONA Executive Directors Michelle Lewis and Kay Hanley:

“We strongly support the introduction of the Music Modernization Act which represents months of collaboration and compromise between the songwriting and tech industries. This legislation enables digital music companies to find the owners of the music they use and reforms the rate setting process for performing rights, ensuring that songwriters and music publishers are paid faster and more fairly than ever before.

“For too long, digital music services have taken advantage of the ‘bulk NOI’ process and often failed to find the correct creators to pay, and now – by working together – this bill ends this practice by creating a private-sector system where money will no longer be lost to inefficiencies and lack of information. The bill also improves how mechanical royalty rates are calculated by introducing a willing-seller/willing-buyer standard.

“On the performance rights side, the bill also replaces the current rate court system with the random assignment of judges used in most federal court cases, and allows the rate courts to review all relevant market evidence into the valuation of how songwriters are compensated.

“We thank Congressmen Collins and Jeffries for their leadership in striking this balance that improves and modernizes our outdated licensing system and gives songwriters the ability to be paid what they deserve across all platforms that use music, including the growing interactive streaming services.”

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