What’s next now that the Music Modernization Act is law?

The passage of the Music Modernization Act marked the end of a years-long effort to enact changes to federal laws governing music licensing. But turning that page also marked the start of a new chapter, one where successes could prove equally challenging to find.

One of the Act’s three components is a new approach to managing how digital music services will pay a new blanket mechanical licenses. The law calls for the creation of an independent body to collect and distribute those royalties, in a similar manner to how SoundExchange handles performance royalties, mostly from Pandora.

The Hollywood Reporter outlined some of the next steps needed. The new collective will need a board of directors to be chosen. NMPA President and CEO David Israelite said that the names of the board nominees and an application to form the collective must be submitted to the U.S. Copyright Office within 90 days of the bill’s signing.

Another critical part of the process is creating a database for pairing compositions with recordings. In previous efforts to untangle the black box of music royalties, many in the music industry have tried to take on this challenge in various forms. Few have made meaningful, comprehensive progress.

In addition, regulations to guide the group’s operation will need to be drafted. This step will require a similar level of cooperation from across the music industry as it took to get the Act passed. Songwriters, streaming services, and publishers both large and small will have their own interests to try to protect during the process.

“There’s always the possibility that industry politics will enter the picture when bylaws are being written,” an unnamed music executive told THR.

Anna Washenko