Licensing Experts Wanted: Now That the Music Modernization Act Is Law, Who Will Lay It Down?

Ron Sachs/CNP/AdMedia/Newscom

Trump holds up the document after signing H.R. 1551, the "Orrin G. Hatch-Bob Goodlatte Music Modernization Act" in the Roosevelt Room of the White House in Washington, DC on Oct. 11, 2018. 

After an intense lobbying effort that yielded the first changes to copyright law in two decades, the hard part begins.

The music industry now has less than 90 days to agree upon a board of directors for a new licensing collective mandated by the Music Modernization Act. The board will comprise 10 music publishers, four songwriters who own their publishing rights and three nonvoting advisers, including one to represent the digital music services. 

Nomination discussions are underway, and sources expect that half of the publishing seats will be filled by executives from the three major publishers, BMG and Kobalt Music Group, while the other five will come from independent publishers. Meanwhile, the Nashville Songwriters Association International and Songwriters of North America are working to nominate candidates for the songwriter board seats.

"Anyone can be on the board, but we are looking for people with particular skills, so for publishers, they should have deep experience in mechanical licensing," says National Music Publishers' Association president/CEO David Israelite. "I expect business executives and attorneys from publishers, rather than the CEOs, will be the ones applying."

By January 2021, the collective can issue a blanket license to such digital music services as Spotify and Apple Music, shielding them from copyright infringement going back to 2018.

Once the board is formed, it must seek proposals on how best to build a database that matches compositions to recordings, ensuring that the licensing fees are distributed to the proper rights holders. It's a tall order: Past efforts to build such databases "failed miserably," says a source who tried. That was in part because many artists "didn't want people to know they didn't write their songs or that they only had small stakes in their songs," says the source. "Nobody wanted to release their information."

But this time around, as streaming drives an increasing bulk of the industry's revenue, artists, labels, songwriters and publishers have more incentive than ever to pony up accurate data -- the only way to collect their share in the digital world.