The Music Modernization Act Transformed Licensing, but There’s More Work to Do: Guest Column by Rep. Darrell Issa

Darrell Issa
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Darrell Issa, Chairman of the House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet represents California’s 48th Congressional District.

Later today on the Nashville, TN campus of Belmont University, I’ll convene a field hearing of the House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet. The hearing won’t just take place in Music City, USA but five years after Congress achieved that rarest of things: A consensus solution that recognized the rights of musical artists and created a way they could be compensated fairly by publishers.

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It may be hard for some to believe, but at the time we crafted this legislation, the music industry and other content owners were being crushed by widespread piracy and an inability to monetize the value of musical creativity.

And the numbers don’t lie. According to data collected by the Recording Industry Association of America, all recorded music revenues fell from $14.6 billion in 1999 to only $6.7 billion in 2015.

Things needed to change. Some important developments came from the private sector as sales of CDs and digital downloads made way for new models brought forward by paid and ad-supported music streaming. But this created new issues as older laws and institutions performed poorly in facilitating the kind of efficient and effective licensing that digital commerce requires that resulted in gaps in properly compensating music creators.

The Music Modernization Act (MMA) was Congress’ answer. It was the biggest overhaul of music licensing in decades, including providing for the first time compensation for pre-1972 sound recordings. The MMA also reformed the way streaming services license certain rights that belong to songwriters and music publishers, creating a non-profit governing agency called the Mechanical Licensing Collective to administer a new blanket license and maintain a first-of-its-kind centralized, authoritative database that allows music publishers to definitively register their works and ensure they receive royalties from streaming services.

These changes allow the digital music streaming economy to find, credit, and compensate intellectual property owners for the royalties earned by their compositions.

Fast forward to now, and the music industry is again seeing healthy profits. In 2022, recorded music revenues reached $15.9 billion, with revenues from streaming that The MLC helps manage making up $13.3 billion, or 84 percent. But even with this success, the music business and technology is still dynamic and changing, and Congress should exercise its oversight responsibilities to determine if our 2018 legislation and the MLC are working as intended. That’s why we are in Nashville today.

The bottom line is the system for collecting and getting royalties to rightful owners is undoubtedly improved, but there are still opportunities to make it better and explore how The MLC has protected the rights of songwriters in its decisions, and how it intends to take on future challenges as Congress intended under the Music Modernization Act.

For Congress, we’re now looking at old challenges with new dangers, including the ever-present threat of piracy as well as artificial intelligence, which pose still unknown questions for intellectual property protection efforts even as they open doors to a new world of technological capability that is, at present, limitless.

To expand on that: If we don’t get AI right, it could very well render not only the Music Modernization Act obsolete – but also the policy choices we make next. The stakes could hardly be higher.

The spirit of today’s hearing is found in legislation I introduced this year with Senator Marsha Blackburn of Tennessee. Our American Music Fairness Act (AMFA) will ensure that artists and music creators are paid when their songs are played on FM/AM radio by bringing radio broadcasters in line with the standard of other platforms that compensates artists when their music is played.

The reasons are fundamental: Protecting one’s intellectual property is the signature right of every American who dares to invent or create. Every artist who first picked up a drumstick, sang to their mirror, or wrote lyrics from the heart did so because they had a dream and wanted to share it with the world. We need to honor and protect their rights as well as their creations.

Fundamentally, Congress has both the opportunity and the obligation to craft policy solutions that safeguard the protection of intellectual property and reaffirm a vital principle: that ownership of one’s artistic creations is sacred and has inherent value. Today’s field hearing represents a milestone for evaluating perspectives on what is working, what is not, and what we can do to make it better for the long run. We can’t wait to get started.

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