How’s the Music Modernization Act Working? Congress Gives Landmark Legislation 5-Year Review

The House Judiciary Committee on Courts, Intellectual Property, and the Internet held a field hearing at Belmont University in Nashville on Tuesday (June 27) to review the Music Modernization Act (MMA) five years after its passage.

To examine its impact on the music business since 2018, the committee invited six witnesses to present their varying points of view on the MMA: Kris Ahrend (CEO, Mechanical Licensing Collective), Garrett Levin (president and CEO, Digital Media Association), Michael Molinar (President, Big Machine Music), Abby North (President, North Music Group), Daniel Tashian (songwriter, producer) and David Porter (songwriter, producer).

“MMA helped address some of those glaring inequities and inefficiencies in the music marketplace. I’m pleased that we have the opportunity today to examine how the law is operating five years later,” said Rep. Jerry Nadler (D-NY) in opening remarks. “I’m interested to hear from our stakeholders here today, whether the MMA and the the MLC it created is operating as intended, and whether any improvements are needed.”

One of the most crucial consequences of the MMA was the formation of a blanket license available for musical work mechanicals, which greatly simplified the licensing for digital services. This development received strong support from songwriters, publishers, and services alike because it greatly eased the work of digital services — who were previously licensing on a patchy, work-by-work basis — and promised to alleviate the estimated millions of so-called “black box” mechanical royalties that sat unclaimed and undistributed due to the old piecemeal licensing system.

Hit songwriter Tashian, whose credits include Kacey Musgraves‘ “Rainbow” and Jonas Brothers‘ “Waffle House,” said in his testimony he has already seen a positive change in his life since the MMA’s passage: “I personally benefited by all aspects of the law. As a songwriter, I’m grateful…this bill reformed a previously unreliable and opaque system into one that provides transparency and accountability.”

The law also provided for a single collective non-profit organization, The MLC, with oversight from the Copyright Office and Congress, to implement and administer this blanket license. The organization’s CEO explained in his remarks why he believes the MLC has been successful despite a tight timeline filled with “challenges” like COVID-19, “billions” of lines of data, and “trillions” of transactions to sort through.

Ahrend noted he is especially proud of the “nearly 60 digital music providers” the MLC has worked with since it’s establishment. The organization “has completed 27 monthly royalty distributions to members, all on-time or early,” and “royalty collections for 2023 are on track to approach $1 billion,” he explained. These numbers were previously noted in an exclusive Billboard interview with Ahrend, published in March.

Molinar, who sits on the MLC board as a representative for independent publishers, echoed much of the MLC’s achievements during his five minute statement to the committee. “I am here to tell you today that the MLC you helped to create is working and working well,” said Molinar.

Two participants, Levin and North, in particular expressed concerns with The MLC’s operations to date. Though Levin, whose organization represents the country’s major streaming services and also sits on the MLC board, began by expressing that the MMA “was and continues to be necessary for today’s music ecosystem” and that the MLC had garnered “truly impressive” results to date, the DiMA leader noted a few criticisms. His primary areas of concern were that The MLC — which he said in its best form should equally balance the interests of publishers, songwriters and streamers — has “on several instances… acted not as a neutral partner but rather as a partner or advocate on behalf of music publishers.”

One way Levin feels The MLC has sided with music publishers is by hiring Pryor Cashman as its outside counsel, the same firm used by the National Music Publishers’ Association (NMPA) during Copyright Royalty Board proceedings, which are typically adversarial between publishers and streaming services.

Given streaming services Levin represents are required to foot the bill for The MLC’s operations, as dictated in the MMA, Levin believes “the services are paying for both their own advocacy costs and the MLC’s, but the MLC is advancing arguments often indistinguishable from the music publishers. That was not the intention of the MMA.”

Later, Ahrend addressed Levin’s concern about outside counsel directly, saying, “The number of lawyers and law firms that work in this particular part of the business is very small…it would be very difficult for us to find lawyers with that level of knowledge and experience in this area who were not already aligned with one group of stakeholders… I constantly talked with the digital services about how we wanted this to work for them, as well as all other rights holders involved, so I think we’ve done our best to step toward the middle of the road. I don’t think it is accurate to suggest we should never be in a situation where we are adverse to services. I like to think we are helping them.”

North, who got her start in the publishing business when self administering her father-in-law’s copyright stake in “Unchained Melody,” raised more concerns about The MLC’s major publisher-friendly stances. She expressed that she felt “the MLC has made unilateral business rules,” particularly regarding how it treats termination rights. “[The MLC’s] terminations decision ignored the derivative work exception doesn’t apply in the context of section 115. This would have benefited the major publishers who control the bulk of legacy copyrights but would have harmed songwriters.” “Fortunately,” she added, “the Copyright Office stepped in to correct” this concern.

When questioned further by the members of the committee about this, Ahrend replied, “the copyright office didn’t contradict our rules so much as it weighed in and offered a proposed rule that would clarify what previously the law had not.”

North expressed that she “believed and was promised … a new authoritative gold standard database” in The MLC during the passage of the MMA, which she supported, but she is unsatisfied with the MLC engaging longtime mechanical rights organization Harry Fox Agency to provide its data set. “One data set is not enough,” she said. “To my knowledge the promised new MLC database and new data set don’t exist.”

While the hearing largely focused on the MLC and the creation of the blanket mechanical license for musical works, Porter, a legendary songwriter and producer, brought up another key component of the MMA during his time in front of the committee: The Classics Act. This portion of the MMA addressed inequality on the sound recording side. Many legacy artists, which hold copyrights made before 1972, were collecting no royalties at all when their works were streamed online. The act addressed this problem by bringing these pre-1972 works, which had been previously only protected by state laws within the federal copyright system, to receive the same treatment as works made after 1972.

Porter, who co-wrote Sam and Dave‘s “Soul Man,” told the committee, “Before the MMA was passed, no one received any royalties from the streaming of that song… this section of the MMA changed that, protecting legacy artists and ensuring they got paid for their contribution to music history.”

Striking a hopeful note, Porter ended testimony with “We worked together to make this historic change, and it is a testament to the fact that when the music community comes together — and Congress acts with certainty and strength — it can make a real difference.”