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.
The bill will also allow digital music services to settle disputes with rightsholders by paying royalties for the past three years at the current statutory rate. Although courts in New York, Florida and Illinois have all ruled that there’s no public performance right in sound recordings under their state’s laws, this would give services a way to settle outstanding claims in California. Settling there would protect them from state infringement lawsuits, but in order to do so they would have to pay three years’ worth of royalties for all the music they used across the United States, not just that state.
Since 2013, House Judiciary Committee Chairman Bob Goodlatte (R-Va.) has been leading a copyright reform process that was initially intended to result in sweeping legislation, potentially including a requirement for traditional radio stations to pay for their use of recordings. Although the legislation expected to pass this year is less ambitious than was originally intended, it’s expected to combine three bills: CLASSICS; The Music Modernization Act, which could remake the way mechanical royalties are collected; and the AMP (Allocation for Music Producers) Act, which would change the way some producers collect royalties.
Passing these three bills — together or separately — would represent a win for Goodlatte, who is retiring after this term. But it would most likely have to be done before summer, when Congress breaks for recess, since many legislators will be busy campaigning in the fall.
The CLASSICS Act also represents a win for labels and artists, a variety of whom have advocated for passing this legislation in some form. A press release from the RIAA about the introduction of the bill quoted former member of The Supremes Mary Wilson, Booker T & the MGs guitarist Steve Cropper and DJ Jazzy Jeff. During a Grammy Week “field hearing” of the House Judiciary Committee, Booker T. Jones and Dionne Warwick asked legislators to address the issue. And on Jan. 12 a variety of 1960s musicians filed an amicus brief in a California lawsuit against Pandora for its use of pre-1972 recordings.