Mechanical royalty overhaul of the Music Modernization Act reaches House of Representatives

Legislation that proposes a mechanical licensing overhaul has been introduced in the House of Representatives. The Music Modernization Act would create a collective to manage the licenses for the mechanical licensing in all digital uses of music compositions. Under the bipartisan proposal, royalties would be based on free market rates of what willing buyers and sellers would negotiate.

It would also change the rate court process for performing rights organizations ASCAP and BMI, allowing for randomly selected judges to decide royalty rates rather than keeping one judge assigned per organization. Finally, the act would allow rate courts to consider the performance royalty rates for recordings when considering musical work performance royalties; current copyright law does not allow that.

Several music industry leaders have weighed in on the introduction of the Act. A joint statement from NMPA President and 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 threw support behind the proposal:

“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.”