Sep 25, 2018

Musicians celebrating new bill that helps them get paid

Illustration: Caresse Haaser, Rebecca Zisser / Axios 
Illustration: Caresse Haaser, Rebecca Zisser / Axios 

After months of negotiations this summer, a new bill that will transform the music industry is expected to become law this week.

Why it matters: The Music Modernization Act (MMA) updates decades-old copyright laws to reflect today's streaming-focused music market. And in a rare event, almost everyone across the industry supports it, because it helps musicians get paid.

"This was a long and complex process but ultimately the music industry has come out stronger and more united than ever."
— David Israelite, President and CEO of the National Music Publishers Association

How we got here: The bill received unanimous support from the House in April, and then from the Senate last week, after a summer-long battle of small tweaks. It now goes back to the House, where it's expected to again receive overwhelming support. If passed, sources tell Axios it will go to President Trump's desk for his signature this week.

Between the lines: It took the Senate several months to reach a point of compromise this summer, as not all groups were supportive of the law.

  • Most musicians are ecstatic. Lobbying groups for music publishers, recording artists and music rights holders are lauding the bill. Actual musicians and songwriters themselves took to social media to rally support for the bill.
  • But others are less happy. SiriusXM lobbied against the bill for months, arguing it put the satellite radio company in a worse position than some of its broadcast and streaming competitors. In turn, thousands of artists — including big names like Katy Perry and Paul McCartney — threatened boycotts of Sirius' parent company Liberty Media.

Streaming companies, like Pandora and Spotify, backed the bill because it modernized some of their payment processes, but also because they risked public outcry from the creative community if they didn't compromise.

"This Modernization Act, having one place where everybody gets paid and listed is huge step forward for the industry, but it's also huge step backward for people who’ve been exploiting musicians for years, like streaming services."
— Ross Gerber, Co-Founder, President and CEO of Gerber Kawasaki Wealth and Investment Management and a musician

Eventually, all sides came to an agreement last week, but getting through some provisions, like what to do about paying rights-holders for older music that was recorded before modern copyright laws, took some nudging.

Between the lines: Streaming revenues have reached an all-time high as more people pay for services like Spotify and Apple Music to get on-demand access to millions of songs. But even though its easier for consumers to get access to their favorite tunes, it's been a nightmare for music right-holders.

  • The Recording Industry Association of America estimates that nearly 75% of all streaming revenue in the U.S. came from subscription services like Spotify and Apple Music in the first half of this year.

The big picture: Music has been able to adjust to more medium changes than most industries, and has been quick to adapt to the on-demand economy.

"In comparison to video, we've been much quicker to adapt. We (the music industry) were first and we are much more digital as a percentage than any other entertainment product."
— Mitch Glazer, Incoming President, Recording Industry Association of America

Be smart: The active lobbying by musicians and songwriters on social media definitely helped push this bill over the sidelines, giving credence to the way social media advocacy has been able to influence policy.

The bottom line: The law is modernizing the music economy to fit with the on-demand economy, which is mostly dominated by streaming services that give consumers access to millions of songs for a relatively low price of roughly $10 monthly.

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