Reducing Government's Footprint on the Music Industry | Citizens Against Government Waste

Reducing Government's Footprint on the Music Industry

The WasteWatcher

On January 28, 2018, the music industry will gather at the Grammy Awards.  Country legends, pop artists, classical musicians, producers, and songwriters will be among those recognized for their innovation in music and sound.

While the Grammys celebrate their accomplishments, many of these music creators do not receive just compensation for their hard work and ingenuity.  While technological advances have changed the way consumers listen to music, compensation for performers and songwriters remains in the dark ages.  Digital radio services continue to be regulated under a compulsory licensing system established in 1972, with rates set by the Copyright Royalty Board (CRB); composers and songwriters are compensated through mechanisms set up in 1909.  Their compensation is unlike any other form of intellectual property rights. 

To address some of the disparities, on December 21, 2017, Reps. Doug Collins (R-Ga.) and Hakeem Jeffries (D-N.Y.) introduced H.R. 4706, the Music Modernization Act of 2017.  This legislation would simplify digital music licensing rights and increase royalty payments to copyright holders based on a willing buyer/willing seller standard.  It creates a single licensing entity to administer mechanical reproduction rights for digital music compositions.  H.R. 4706 would also eliminate the bulk notice of intent (NOI) process through the Copyright Office, which can prevent songwriters from receiving full compensation for their work and being paid in a timely manner. 

Under current law, music copyright compensation rates are set by a single judge assigned to one of the two major performance rights organizations (PRO).  To ensure that the rate court judges review the cases before them with a fresh look at the facts presented, the bill requires the judges to rotate cases from the PROs, rather than having the same judge adjudicate all rate cases from one PRO.  Current law forbids federal rate courts overseeing the consent decrees for the two major PROs from considering sound recording royalty rates as a relevant benchmark when setting performance royalty rates for songwriters and composers.  The legislation would eliminate this barrier, providing a more level playing field for evidence to be provided before the court for its consideration.

The Music Modernization Act of 2017 is a good step forward in providing across-the-board equity for everyone working in the music industry.  On January 26, 2018, the House Judiciary Committee will be holding an oversight hearing entitled, “Music Policy Issues: A Perspective from Those Who Make It.”  This hearing will provide an opportunity for the committee to learn more about the challenges artists and composers face when seeking adequate and fair recompense for their work. 

If Congress moves forward with legislation such as H.R. 4706, perhaps at next year’s Grammys, the music industry will have one more thing to celebrate.  The government will have loosened its grip on compensation for singers, songwriters, and producers, and allowed them to determine the value of their intellectual property in a free market.