A Major Compromise Has Been Reached on the Music Modernization Act (Updated)

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Performance rights organization SESAC, the National Music Publishers’ Association (NMPA) and various other groups have now reached a resolution over a serious Music Modernization Act (MMA) impasse.

Updated, August 3rd: After our initial publication on August 2nd (Thursday), the NMPA offered more details on the changes that are underway.  Here’s a complete wrap of these new updates, with a full q&a with NMPA VP of External Affairs Charlotte Sellmyer.

SESAC has just won a major concession related to the Music Modernization Act (MMA), one that transitions the Mechanical Licensing Collective (MLC) from a near-monopoly to a more competitive organization.  The development effectively ends SESAC’s opposition to the bill, which threatened to kill the legislation entirely.

Previously, the MMA called for a government-created MLC that would enjoy complete control over streaming mechanical licenses.  In an email this morning, the National Music Publishers’ Association (NMPA) strongly contested that characterization, arguing that the MLC was always designed to be competitive with other mechanical licensing groups.

Others just as forcefully disagreed with the NMPA, though either way, that aspect is no longer part of MMA, opening the door to a more competitive licensing marketplace.  Accordingly, performance rights organization SESAC, major publisher representative NMPA, and various other groups have just reached a momentous resolution.

In a statement shared with Digital Music News, the various parties jointly indicated that they “have agreed to work together to support the Music Modernization Act (MMA)”.  The parties at the table also included the Nashville Songwriters Association International (NSAI) and the Songwriters of North America (SONA).

Previously, the NSAI had vehemently objected to SESAC’s amendment proposal.  That included a high-profile grassroots campaign involving thousands of songwriters, though SESAC had remained unswayed.  Now, it appears that SESAC has won enough of  a concession to move forward.

The statement alluded to a major shift in the structure surrounding the Mechanical Licensing Coalition (MLC), one that limits the specific licenses that can be offered while leaving more competitive leeway for other organizations.

“At the encouragement of Senators deeply involved in the legislation and recognizing the importance of the MMA for the future of the music industry, the parties have endorsed a provision under consideration by the Senate to amend the Mechanical Licensing Collective’s (MLC) administration of voluntary licenses outside the scope of the Section 115 compulsory license in order to ensure private vendors can continue to participate in the music market, maintaining competition which is beneficial to songwriters and producers,” the statement outlined.

Theoretically, the decision will allow organizations like the Harry Fox Agency (HFA), owned by SESAC parent Blackstone Group, to remain in business and retain their clientele.  But we’ll have to await more details to see exactly what this means for non-MLC competitors.

Previously, Dina LaPolt, an attorney responsible for architecting portions of the MMA, blasted HFA as incompetent.  “We worked very hard to get songwriters on the governing board of the Music Licensing Collective so they can be involved in the oversight of properly matching the mechanical royalty income,” LaPolt fumed to Variety.

“We cannot have a competing entity.  We are in this problem because of HFA’s inability to effectively license.  HFA should just shut their doors, fire everyone, and sell off all their furniture.”

It appears that the tough tone has now been softened, however, with HFA/Blackstone suddenly welcomed into the bill.

“The broad coalition demonstrates an unprecedented commitment by the industry to support songwriters and music publishers, who will benefit from the bill’s ultimate passage, resulting in the most comprehensive reform to the music copyright business in generations,” the coalition continued.

SESAC chairman & CEO John Josephson echoed that sentiment, and signaled strong agreement with the concessions.  “At the encouragement of Senators closely involved in this legislation, all parties came together to agree on outstanding items related to the MMA including the reform of the Section 115 compulsory license and other important related matters,” Josephson said.

“We share a collective responsibility to help ensure that the MMA benefits all stakeholders in the industry and look forward to the Senate’s consideration of the bill.”

We also reached out to NMPA chief David Israelite for more clarification on this compromise.  That deep-dive is forthcoming, though for now, Israelite seems very positive about the agreement.  “We are thrilled that we have mutually agreed on a path forward,” Israelite stated.  “We are stronger when our music family speaks with one voice and this agreement will allow us to come together to work towards the passage of the MMA. Songwriters need and deserve this bill. We thank the Senators involved for their leadership and guidance.”

We’ve also reached out to Dina LaPolt for more discussion on the bill.

More as this develops.