War Breaks Out Over pre-1972 ‘Oldies’ Legislation — Will This Kill the MMA?

Senator Ron Wyden (D-Ore.), whose 'ACCESS' Act calls for a simplified pre-1972 update.

Senator Ron Wyden (D-Ore.), whose ‘ACCESS’ Act calls for a simplified pre-1972 update.

How should pre-1972 ‘oldies’ be overhauled by the Music Modernization Act?  That’s the focus of a brand-new battle on Capitol Hill, one that could seriously sideline broader copyright reforms.

So much for the spirit of compromise.  Now, it looks like the Music Modernization Act (MMA) is mired in acrimony, with oldies recordings a key area of contention.

The controversy involves recordings released prior to February, 1972, the last time that music copyright was seriously updated in the U.S.  An earlier bill, called the CLASSICS Act, calls for a broad expansion in copyright protection for pre-1972 works, even beyond the terms applied to post-1972 works.

That drew howls of protest from technology companies and preservationists, among others, who argued that CLASSICS was a mere subsidy to major recording labels.  Perhaps overconfident following a unanimous House approval of the broader MMA, labels refused to cede ground.

Which made the next development rather predictable.  A brand-new bill, dubbed the Accessibility for Curators, Creators, Educators, Scholars, and Society (ACCESS) to Recordings Act, was introduced by Oregon Senator Ron Wyden.  The bill calls for exactly the same copyright protections for all recordings, pre-1972 or post-1972, while shifting the jurisdiction for older recordings entirely to the federal government.

“The ACCESS to Recordings Act, by applying the same term limits and rights and obligations that apply to other copyrighted works, would help preserve our cultural heritage and open up older works to rediscovery by scholars, creators and the public,” Wyden declared last month.

“I have serious concerns about the lengthy terms in current U.S. copyright law that tip the balance toward limiting rather than promoting creativity and innovation, but until Congress is willing to reconsider it, we shouldn’t go beyond those protections and provide unprecedented federal copyright term for sound recordings.”

Is the Pre-1972 ‘ACCESS to Recordings Act’ Really So Bad?

Frankly, that sounds like a simplified improvement, and one likely to increase investment and market clarity.  Instead of a complex patchwork of state and federal laws, ACCESS puts it all under one roof.  It also vastly simplifies copyright terms by erasing the 1972 divider completely, something that makes it easier for both content owners and licensees to understand.

A large number of music industry groups sharply disagree, however.  And they’ve decided to fight Wyden’s bill tooth-and-nail.

Just this morning, seven different organizations petitioned the Senate to ditch ACCESS in favor of CLASSICS.  The American Federation of Musicians, Content Creators Coalition, Future of Music Coalition, The Living Legends Foundation, the Recording Academy (which oversees the Grammys), The Rhythm & Blues Foundation, and SAG-AFTRA slammed Wyden for taking money away from aging artists.

“Wyden’s bill would undermine the retirement security of elderly artists,” the group noted in an email sent to DMN.  “These artists are literally watching the clock run out on their ability to receive fair pay for their work while digital radio makes billions of dollars a year from airplay of those same recordings.”

Supporters of Wyden’s bill contend that artists are rarely receiving the money anyway.

Instead, the money is typically captured by labels, estates, and other intermediaries, especially if the artists themselves are dead.  Accordingly, Wyden has blasted CLASSICS for being a subsidy to major recording labels, who are trying to extend copyright control over a range of lucrative classics.  That includes a raft of iconic groups from the 60s, starting with The Beatles.

(Update: the Content Creators Coalition has just responded to this accusation, telling DMN that the CLASSICS Act would split royalty payments 50/50 with the label and artist, similar to the arrangement created by SoundExhange on the interactive digital performance side.  They also noted that the surviving Beatles (expectedly) support CLASSICS.)

Indeed, those groups are critical revenue-generators, though the question is whether it makes sense from a policy perspective to extend their copyrights beyond the 95-year term.  Strangely, the CLASSICS advocates are arguing that digital radio would somehow dodge payments on pre-1972 recordings if ACCESS passes, though platforms like Pandora and Sirius XM Radio will actually pay under both bills.

In their defense, CLASSICS advocates state that pre-1972 terms aren’t actually being extended.

They cite measures like the Sono Bono Copyright Term Extension Act of 1998 to reaffirm that these extensions have already been granted.  But other arguments are muddy, and certainly devoid of any compromise.

All of which may seriously endanger the previously fast-tracking MMA, for obvious reasons.

Here’s the full letter sent to the Senate this morning (June 13th).

June 13, 2018

Dear Senators:

As unions, membership organizations, and advocacy groups representing recording artists, performers, vocalists, musicians, producers, and songwriters, we write to state our strong opposition to the newly-introduced “ACCESS to Sound Recordings Act” (S.2933) and to reiterate our enthusiastic support for the Music Modernization Act (S. 2823) (“MMA”). We strongly support the portion of the bill that would ensure compensation for airplay of pre-72 works known as the “CLASSICS Act” (S. 2393). We also affirmatively reject any proposals that would leave in place a below-market rate payment standard to artists for exploitation of their work.

The CLASSICS Act is vital, time sensitive legislation that is critical to thousands of artists who recorded music or spoken word performances before 1972. These artists are literally watching the clock run out on their ability to receive fair pay for their work while digital radio makes billions of dollars a year from airplay of those same recordings. The CLASSICS Act would ensure that artists who created and contributed to timeless songs finally get their due and would bring much needed certainty to one of the most contentious and confused areas of music licensing today. It is the product of a lengthy, considered process stretching back over several Congresses and represents a carefully balanced compromise that virtually all stakeholders have come together to support.

We are disappointed that the introduction of the “ACCESS Act” was done without consulting any artist group, organization, or union who would have made it clear that the bill’s eleventh-hour introduction is not a viable solution. The “ACCESS Act” would undercut the goals of the MMA by cutting compensation for the older artists that it is expressly designed to benefit. It would unfairly shorten the period in which pre-72 recordings produce royalties for the artists and copyright owners effectively shutting down a critical lifeline of payments to artists who need it most.

Proponents of the ACCESS Act claim, incorrectly, that the CLASSICS Act extends the term for pre-72 recordings and that their bill provides a fix. The CLASSICS does no such thing – Congress set the term for these copyrights in the Copyright Act of 1976 and the Sonny Bono Copyright Term Extension Act of 1998; the CLASSICS Act doesn’t alter it in any way. 

Indeed, it is the “ACCESS Act” that would alter existing state and federal copyright terms, eroding protection for older artists by 15-20 years in some cases. This would arbitrarily and unfairly result in older artists receiving less copyright protection than younger artists – reinstating exactly the kind of imbalance and differential treatment the CLASSICS Act and the broader MMA are trying to fix.

We also note that one entity, Music Choice, has very recently raised concerns about the performance right rate setting reforms in the MMA and has incorrectly asserted that these reforms are “last minute.”

For twenty years, the law has applied a fair market value “willing buyer/willing seller” standard when determining royalty rates for thousands of digital services streaming sound recordings under statutory licenses. However, three services (Music Choice, Sirius XM, and Muzak) have paid below market rates thanks to a special subsidy provision created back in the 1990s for certain “pre-existing” services, resulting in a deeply distorted market and unfair competitive advantage.

Congress has been considering options to end this subsidy rate and restore fair competition – and fair market pay for artists – for years. There is nothing new about this debate. The Senate Judiciary Committee held a hearing on the issue on July 29, 2008, and it was aired at length during the music licensing hearings held by the House Judiciary Committee. The Copyright Office recommended the change in its 2015 report on music licensing reform. The “Fair Play Fair Pay Act,” first introduced in April 2015 and reintroduced in March 2017, included this change, and the music community issued a joint press release in January 2018, supporting this reform.

This is a matter of basic fairness that would create a level playing field for all digital market services and ensure fair pay for artists.

We urge you to pass the CLASSICS Act as part of the Music Modernization Act and reject proposals that would undermine the legislation’s core purpose.  

Sincerely,

American Federation of Musicians
Content Creators Coalition
Future of Music Coalition
The Living Legends Foundation
Recording Academy (GRAMMYs Organization)
The Rhythm & Blues Foundation
SAG-AFTRA

 


 


5 Responses

  1. Anonymous

    It may be worth keeping an eye on what Makan Delrahim at the DoJ is up to. He recently mentioned that the DoJ will be taking another look at the ASCAP/BMI consent decrees. Whatever happens there could also have an effect on MMA’s passage. Perhaps the consent decrees could be amended to allow ASCAP and BMI to administer mechanicals, negating the need for an MLC. I wouldn’t consider the PROs to be the pinnacles of efficiency, but I sure as hell wouldn’t trust SoundExchange to administer publishing mechanicals properly.

    Reply
    • Jim

      I would want to see ASCAP and BMI with less power.

      Someone might be able to answer why ASCAP can sue a venue for thousands of dollars if it’s found they allowed a cover to be performed?

      Change that entirely. Venues are closing because of this – and ASCAP doesn’t even pay the actual songwriter, but they assume that open mic performances or whatever cover bands are playing, are today’s top 40 which we know isn’t true.

      The ability of ASCAP to demand huge fees is BS.

      We easily could argue that the songwriter really doesn’t deserve all this money for so many years.

      Why is it that radio stations don’t pay the performer? Why is it that we don’t care about the performer, but some faceless songwriter.

      If I had to choose where the money should go, I’d rather it go to the performer and not the committee of people writing a hit in a room. The limited amount of money that’s there these days should go to the performer, mostly. Back in the old days, Publishers were the ones who actually printed sheet music. What do they actually do today? Yes, they perform valuable functions, I believe they gather money and give some to the performer or songwriter. They don’t do anything except collect money, and they can hype, too, they’re well connected insiders. But they’re not really necessary if things are structured different.

      If Spotify is like a near monopoly, or the top 10 are definitely an oligopoly, who beside the artist needs to be compensated? If we forget songwriters (who would be able to charge money to write a new hit song) and publishers and everyone else except the performers, and had the websites sending all the money to the performer, that would work out perfectly fine. There wouldn’t be deficiencies here or there, things would move smoothly. The website pays the band, and everyone who things the band should give them some money, goes to the band. That’s how it should work. For years, things like labels have been ripping off performers. I see no reason why we have to continue to have laws that allow and encourage that, change the laws and give the performers the money. When labels feel they need money, they can get it from the performer.

      Today, a lot of what it takes to get music out there is just to upload it. Performers can do that.

      Performers need to figure out how to get more money by having their fans give it to them directly. Performers need to start getting paid a penny, nickel, dime per content listen or view. What Spotify and the rest are paying is nothing like a CD sale. Yeah, if you listen to 1000 songs from the album, you might start to get close to what a CD costs. But, really, who listens to 1000 songs, how many albums are really listened to 100 times? Most likely, you’ll get much much less than that.

      Reply
  2. Will Buckley

    Looks like an 11th hour re-run of SOPA with a Senator from Oregon of all places leading the charge for Silicon Valley.

    But wait Senator Wyden a Democrat, natch, born in Palo Alto and reaping the benefits of hosting massive server farms for Google, et al in his state consuming and paying for 50% of the energy the state produces.

    Reply
  3. Tony Gottlieb

    Perhaps Senator Wyden and his wrecking ball crew need to know that in Tennessee we have the votes to pass a State level pre-1972 digital rights bill and that they (his bunch) aren’t going to like the outcome. The Music Modernization Act is an acceptable compromise, let’s get it passed. A Tennessee Bill, currently in summer study, pending passage of the MMA, has an entire State full of unpaid music people ready to turn off the sound.

    Reply
  4. Tim Brooks

    The problem here isn’t the MMA. It isn’t even about streaming royalties. Artists (or at least rights holders) would get them under either CLASSICS or Sen. Wyden’s ACCESS bill. The problem is that corporations, used to getting whatever they want in Washington, refuse to accept Sen Wyden’s bill that would provide BOTH royalties and preservation and access for really old recordings (95 years-plus). And simplify the entire copyright situation in the process. Artists are being played here.

    Reply

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