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Laying Down the Law: How the Music Business Came Together to Score Two Policy Wins (Column)

Tuesday evening, the music business scored a political victory that some executives couldn't chew on until after Yom Kippur ended: The Senate passed the Music Modernization Act.

Tuesday evening, the music business scored a political victory that some executives couldn’t chew on until after Yom Kippur ended: The Senate passed the Music Modernization Act. (It’s officially been renamed the Orrin G. Hatch Music Modernization Act, after the Republican senator and songwriter.) For a bill that was introduced in December and has been planned for years, the denouement was dramatic: A push from SiriusXM to stop the bill, a letter from leading artists threatening a boycott of the satellite radio company, a hotline vote and an 11th hour compromise that let the bill pass. Neither side got everything it wanted, both got what they needed, and then it was done. Some lobbyists even got to go out for dinner afterward. 

The legislation — which now needs to pass the House of Representatives in its amended form before going to the president — is the most significant copyright reform in a generation. It will completely remake the country’s mechanical licensing system, give streaming services a safe harbor from statutory damages in mechanical rights infringement lawsuits not filed before last Dec. 31, change the way the Copyright Royalty Board determines rates for mechanical royalties and SiriusXM, establish payments for the digital use of recordings made before 1972 and allow producers to be paid directly by SoundExchange. It’s also the music industry’s second major policy victory this week after a Sept. 12 vote in European Parliament that moved ahead a version of the EU Copyright Directive that included a provision that could require sites like YouTube to license music at market rates. 


On the surface, these bills don’t have much in common — the Copyright Directive is a sweeping legislative update that will force sites like YouTube to compete fairly with services like Spotify, while the U.S. law is an in-the-weeds reform that only became possible with help from some of those same companies. But they show how the music business — badly being bruised after its support for the Stop Online Piracy Act (SOPA) earlier this decade — can still wield some influence in Washington and Brussels. 

The most important factor may be that, in both cases, the entire industry spoke with one voice. That doesn’t mean that every creator or company agreed with these bills — not even close — just that they both assembled broad coalitions of supporters. In the EU, the International Federation of the Phonographic Industry (IFPI) probably did the most to push Article 13 — which basically holds intermediaries like YouTube responsible for the creative works they distribute — but it had support from publishers, creators, collecting societies and other media businesses. In the U.S., the National Music Publishers’ Association (NMPA) pushed the core of the Music Modernization Act and the Recording Industry Association of America (RIAA) led the charge on pre-1972 recordings, but both had the support of the Recording Academy, the collecting societies and an array of publishers, labels, managers, lawyers, songwriters and artists. 

This wasn’t easy. These organizations might be best described as “frenemies,” and they’re usually at odds — higher mechanical royalties mean lower margins for record labels. That’s hurt their influence in politics. Put yourself in the position of a Congressional staffer who sees a succession of music lobbyists, each asking for help dealing with a problem like piracy — and then trying to get leverage over the other parts of the business. After a while, a clear message about “internet freedom” looks awfully appealing. 


Uniting the industry behind the Music Modernization Act meant constructing a bill that offered something to everyone and then making compromises to build the biggest coalition possible. As a reporter covering this legislation, I sometimes got the sense that the coalition behind it was held together with chewing gum and hope. Would all of the lobbyists involved get along? (Generally yes, but I’m not sure they’re in a hurry to do anything like this again.) If one part of the bill stalled, would part of the coalition abandon the rest? (I don’t think this was ever seriously considered, but you’d have to be pretty naïve to think no one thought about it.) Did everyone have the stomach to make the necessary compromises? (It turns out, yes.)

Those compromises continued until Tuesday night. Over the last few weeks, RIAA president Mitch Glazier and CEO Cary Sherman negotiated a compromise to win the support of Senator Ron Wyden (D-Ore.), who had put forth his own bill. It means that older recordings will go into the public domain faster but also establishes that streaming services must pay to use recordings made between 1956 and 1972 until 2067. Tuesday evening, Glazier negotiated a deal with SiriusXM that allowed the satellite radio service to keep its current royalty rate until the 2027 Copyright Royalty Board proceeding. The first seems completely sensible, while the latter is the price of getting a bill passed.

Both the RIAA’s efforts to establish a digital public performance right for pre-1972 sound recordings and the EU copyright reform process faced significant opposition from technology companies and anti-copyright activists. Until recently, they could stir up public opposition. But although there was mass online opposition to Article 13 of the EU Copyright Directive, Europeans didn’t take to the streets in significant numbers. In the U.S., while Lawrence Lessig and the usual anti-copyright activists opposed a digital public performance right for pre-1972 sound recordings, hardly anyone without a law degree seemed to care much. 


Ironically, as technology companies build more traditional lobbying power, they seem to be losing some of the “soft power” that gave them so much influence in the first place. Years ago, “digital rights” groups, some of which they funded, would reliably oppose bills that could hurt them. Now that’s harder. The mass email and Twitter campaign against Article 13 may well have backfired and urgent cries about a digital public performance right for pre-1972 recordings didn’t seem to get anyone excited. Suddenly, the technology companies that were once so beloved by politicians and the public alike now have their own public relations problems.

The music industry has a wish list of other policy priorities, including, most prominently, establishing a right to get paid for the use of recordings on terrestrial radio. Nothing is going to happen soon — these pieces of legislation aren’t done yet and both of them took years of planning. But for the first time in a long time, it seems possible.