After years of deliberations over several key music business issues, Congress will soon begin writing new laws that will shape the streaming economy. On Dec. 8, the House Judiciary Chairman, Rep. Bob Goodlatte (R-Va.), and committee member John Conyers (D-Mich.) released their first proposal for the long-awaited copyright reform process. “The next two years could be the most important years of the coming decade in terms of how creators get paid,” says Daryl Friedman, chief advocacy and industry relations officer for The Recording Academy.
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As abstract as they may seem, these issues will define the future economic structure of the music business. Musicians can influence this process more than they may realize, and The Recording Academy offers suggestions on how to get involved, at grammy.com/advocacy. Says Friedman: “Creators are starting to realize the impact they’re having.” Below is a look at the major music-related issues facing Congress.
Songwriter Payments
“The biggest issue for songwriters is fair pay, because we’re not compensated the same way as owners of master recordings,” says singer-songwriter Aloe Blacc, echoing a concern expressed by many creators and music publishers. That’s a legal issue. Mechanical royalties — which songwriters receive when their compositions are used in albums, downloads and streams — are set by law, and the two biggest public performance collecting societies, ASCAP and BMI, which pay songwriters and publishers, are subject to antitrust consent decrees that limit their negotiating power. Publishers and songwriters want limits set to the consent decrees that would let them negotiate in a free market. The Songwriters Equity Act, written to address this, didn’t pass, but the ideas in it could become part of the copyright reform process.
The “Value Gap”
Record labels and many creators believe that the Digital Millennium Copyright Act (DMCA), which in most cases allows sites like YouTube to use content uploaded by users until they receive a takedown notice, gives sites a way to pay less for music than some of their competitors. The “gap” is the difference between the fees paid by sites like YouTube, which licenses music from almost every label — arguably with a negotiating advantage it gets from the DMCA — and companies like Spotify, which have to come to terms before using recordings. Legislation on this is unlikely, but the European Union could enact changes that give copyright holders more negotiating leverage.
Terrestrial Radio Performance Royalties
Unlike nearly every other country in the world, U.S. terrestrial radio stations are not required to pay to use sound recordings (although they do pay songwriters). “It’s the only part of the U.S. economy where you can use someone else’s intellectual property without permission or compensation,” says Friedman. “That’s an affront to creators.” The Fair Play, Fair Pay Act, which addresses this, could be incorporated into Goodlatte’s copyright legislation.
The Future of the Copyright Office
In October, Librarian of Congress Carla Hayden suddenly and controversially removed Register of Copyrights Maria Pallante from her job, renewing debate about whether the Copyright Office really belongs in the Library of Congress. Goodlatte and Conyers’ proposal would give the Copyright Office more independence, which would probably be good for the music business.
The Amp Act
The Allocation for Music Producers (AMP) Act would codify a way for producers, mixers and engineers to collect payments directly for the use of recordings to which they have rights on satellite radio and online radio services. SoundExchange, which collects such royalties, already makes these payments directly, with the permission of the owner of the recording. Goodlatte is expected to introduce some version of this as well.
This article originally appeared in the Dec. 22 issue of Billboard.