Senators from both parties, led by Chris Coons (D-Del.) and John Kennedy (R-Louis.) Wednesday afternoon introduced the CLASSICS (Compensating Legacy Artists for their Songs, Service, & Important Contributions to Society) Act, which would require digital services to pay both rightsholders and artists for the use of recordings made before 1972. The bill has had a House of Representatives counterpart since July, and is widely expected to pass into law -- either on its own or as part of a larger copyright reform package.
Unlike traditional radio stations, digital music services -- both online and otherwise -- pay to use recordings made after 1972, which are covered by federal copyright law. Recordings made before then are covered by state law, and the question of whether online services must pay to use them has led to complicated litigation in several states. Both versions of the CLASSICS Act require digital services to pay for the use of pre-1972 recordings in the same way, and at the same rate, they pay to use those made later. SoundExchange will collect royalties on behalf of performers, as it does for recordings made after 1972.
The bill primarily affects online radio services, such as Pandora, as well as SiriusXM. While Pandora backed the bill, SiriusXM -- which aggressively tries to reduce the rates it pays for music, in a variety of ways -- opposed it.