The current "mechanical licensing" system, which grants the right to reproduce and distribute copyrighted music for streaming, is outdated. It was written into law in 1909 to mediate disputes between songwriters and manufacturers of player pianos, which were, in a sense, the streaming platforms of their day. This new kind of license allowed songwriters to be compensated when their music was played by the pianos.
Although folks no longer head down to the saloon for a bottle of whiskey (or a sarsaparilla) and a rousing rendition of "The Entertainer" on a player piano, that same set of archaic copyright rules applies to modern online streaming platforms. It should not come as a shock that this system doesn’t work for the modern age.
Securing the rights to stream music is an arduous process. First, streaming services have to identify every author of a given song. Then, they must certify that each of those authors (composer and songwriter) has individually received a paper letter for every song the platform wants to stream.
While that may have made sense in 1909 – a year before the first public radio broadcast – music streaming services have tens of millions of songs in their libraries and add thousands more every day. To send thousands of paper letters a day to every new song author is at best costly, difficult, and time-consuming, and at worst impossible.
It’s also worth noting that these letters don’t represent the start of a negotiation or dictate the rates or payments an artist receives. Rates are set by law. But if a music platform fails to certify a song, it’s on the hook to pay damages every time the song's played, which creates the potential for exorbitant legal costs.
Take Bruno Mars' “Uptown Funk,” which has 11 different authors and has been played at least a billion times on streaming platforms. If a platform had failed to notify all 11 authors, they would face statutory legal damages every single time the song was played."
This leaves streaming companies with few options, each of which has the potential to chill innovation and limit consumer choice. They can either offer a limited library of songs that they’re completely confident they have the rights for, or attempt to contact every songwriter and composer necessary to compete in the marketplace, but face increased risk of legal penalties if they end up missing just one author.
This system fails everybody who listens to music. Fans want to support artists they like. Artists and labels want to be paid for the music they create. And streaming services want to follow the law and offer consumers as much great music as they can.
That's why IA would like to commend the House of Representatives for passing the MMA. The bill would establish a clearinghouse, called the Mechanical Licensing Collective, which would serve as the manager of mechanical licenses between digital services and song authors.
Artists would no longer have to wait by the mailbox for letters from streaming platforms in order to get their music out there. All they would need to do under the MMA is indicate the songs for which they have a copyright to the clearinghouse.
Streaming services would agree to pay a set fee for streaming songs from the clearinghouse and then the clearinghouse would pay artists what they’re owed for use of their mechanical licenses.
Under this system, streaming platforms get a 21st century process for acquiring mechanical licenses that lets them spend more money on delivering great music, not snail mail letters and costly lawyers.
It’s past time that we bring the laws and regulations governing online streaming out of the age of player pianos and into the internet age.
The entire music industry supports bringing mechanical licensing into the digital era. Let's make sure lawmakers in the Senate are listening.
Michael Beckerman is president and CEO of Internet Association