How the MLC's Music Modernization Act will change the music industry in 2021

📻 Hello! Thanks for tuning into today’s edition of Arpeggio.

Lately, I’ve been updating a Morning Vibes playlist from last summer. It originally had a more acoustic feel, but I felt to make it longer I’d expand the parameters. This list is consistent with a low to mid-tempo, low energy, feel-good R&B/Indie R&B. I’ll likely continue updating this list every summer.

Perfect for your everyday work from home routine. Give it a spin!

Today, I’m sharing some of the sweeping changes happening in the music industry. I’m taking a deep dive into a new law that’s going to into effect in January 2021, but first, here’s some of the latest news from the music biz.

As streaming numbers continue to rise, so too does the trend towards curated music.

📻 In a world where music is here today and gone tomorrow, Savory Sounds Radio is curating the sounds to be savored.

📈 Early Rising is a new space to discover artists–a signal in a world full of mainstream music.

💥Jill Scott vs. Erykah Badu shined in Neo-Soul ‘Versuz’ battle

👑 The King of Rock and Roll, a.k.a. Little Richard, passed away at 87 years old. He’s well known for creating the blueprint for the music industry to take from. Here’s some of his music linked below.

🎶 Hip Hop & R&B Legend Andre Harrell passed away at 59 years old, receiving an outpouring from the music industry. Andre Harell’s life will be honored in a forthcoming BET mini-series. Harrell is the founder of the label Uptown Records.

🎸Bandcamp waived revenue fees again for Frist Friday, raising $7 million for musicians on their platform

🎬 SoundCloud is launching new original programming in collaboration with Twitch

🎤Live Music: 1000s of music venues across the U.S. are in danger of closing without Federal Aid, while an initiative to reopen every venue safely has launched in eight cities including Los Angeles, Austin, and Portland. Less than 10% of Americans feel comfortable attending a concert right now, and when concerts return they are likely to be heavily fortified against the virus.

🎮Fortnite users reach 350 million, with Dillon Francis, Steve Aoki, and Deadmau5 headlining the latest ‘Party Royale’

🎧Spotify should pay musicians more? Let’s talk about how

As the music biz adapts and improvises, there are even more changes on the horizon. The Music Modernization Act was signed into legislation in 2018 and will become effective in January 2021.

1. Title I: Musical Works Modernization Act

2. Title II: CLASSICS Act

3. Title III: AMP Act

Title II: CLASSICS Act is an interesting place to start breaking down the new law.

• The Act extends limited federal copyright protection to sound recordings made before 1972. These works currently receive no protection under federal copyright law. Any recordings made before 1972 fall into fair use and public domain, so radio stations and other institutions who use this music are not currently required to pay certain royalties for use. Fair use limitations will be preserved in some cases; exemptions will be made for libraries, archives, educational institutions.

• This new provision will establish protection for these recordings and get the credit to the legacy artists so they can get paid as modern artists are for use of sound recordings. Pre-’72 sound recordings will be licensed under the same statutory scheme as all other sound recordings.

• The Copyright Royalty Board will see to it that Digital radio will pay a royalty rate for the recordings they play. The royalties will then be distributed by SoundExchange via the statutory license.

• The act will effectively end the need for state-by-state litigation for recordings created before 1972 by replacing the patchwork of state copyright laws and allowing for digital services to settle outstanding legal disputes by paying for three years of past performances.

The Title I: Musical Works Modernization Act establishes the Mechanical Licensing Collective, which will create a database to house songwriter and publishing credits and make it easier to track down the right person to pay.

• Overhauls the process of how mechanical licensing is transferred, essentially making it easier for artists to receive royalty payments from online streaming providers.

• The MLC will collect and distribute royalty payments. Overall, it will help songwriters get paid more when their songs are streamed.

• The MLC makes it easier for ASCAP and BMI to argue for higher performance royalty rates. These two performance rights organizations will also be forced to rate court proceedings consistent with other federal litigation by randomly assigning the proceedings to federal judges in the Southern District of New York rather than having all proceedings occur before the same judge each time.

• Allows for the Copyright Royalty Board to set royalties of musical works based on what a willing buyer and willing seller would agree to in a free market

Title III: AMP Act, an acronym for The Allocation for Music Producers Act, will make formal something SoundExchange is already doing.

• This procedure will allow producers and other personnel involved in the sound recording process to collect performance royalties through SoundExchange.

• SoundExchange is now required to adopt a policy to receive letters of direction from artists designating a portion of their royalties to be paid to producers, engineers, and mixers.

When reading over that last point, it’s almost unbelievable to me that this is only happening in 2021. Keep in mind, this provision isn’t part of the CLASSICS Act for pre-’72 recordings–this is all recordings, ever made. That might seem almost criminal, yet it’s because the laws in place are almost archaic at this point, in no way up to speed with today’s technology employed by DSPs like Apple Music, Spotify, etc.

As someone with some background in audio production, the AMP Act is important because to this day, engineers who worked on some of the biggest records still receive zero royalties!

Imagine producing, recording, mixing, and mastering The O’Jays 1975 album Family Reunion and receiving no royalties. That’s show business, baby!

Not for much longer, though. The MLC process, as broken down below, will provide a new path forward for getting creators paid what they deserve.

To learn more about the inner-workings of the MLC, check it out on their website linked below:

The MLC Process

The CEO of the newly-formed company, Kris Ahrend, is excited to get to work.

According to MBW, Kris Ahrend also serves on the boards of Nashville Downtown Partnership and the Nashville Chamber of Commerce.

If you would like a further in-depth understanding of music publishing and the music business, this article below by Narjeet Soni details the process extremely well below, available to Billboard Pro subscribers only.

Tracking How Royalties Flow In The Digital Age, And How The MMA Will Play a Role by Narjeet Soni

Thanks for reading! I’d love to hear your questions, thoughts, and comments.

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- Jimmy Seykot