House Expected to Clear Music Copyright Bill Soon

The House may clear a music copyright bill as early as next week that would streamline the flow of digital royalties, music industry and congressional sources told Bloomberg Law.

House and Senate lawmakers worked together as the Senate made changes to the legislation (H.R. 1551) before passing it on a voice vote Sept. 18, an aide to Rep. Doug Collins (R-Ga.) told Bloomberg Law. Collins, who co-sponsored the House version of the Music Modernization Act (H.R. 5447), is hopeful about quick House action, the aide said.

The bill would create a collective to sell blanket licenses for digital streamers like Spotify who previously had to secure mechanical rights—needed to sell cassettes, CDs and now downloads—from individual copyright holders. It would also create new federal protections for sound recording rights, which are separate from mechanical rights, for songs recorded before 1972, and change other aspects of copyright law.

The lack of a blanket license for streamers, which left them vulnerable as “dead to rights infringers,” unified musicians, record labels and streamers behind the legislation, National Music Publishers Association CEO David Israelite said. That unity dictated what other elements could be negotiated into the bill without major objections between often conflicted interests.

“That’s the magic potion for the entire bill. The rest of the bill was a passenger on this train,” said Israelite. He added, “no one is worried about it re-passing the House. I would be shocked if it’s not another unanimous vote in the House.”

Sen. Orrin G. Hatch (R-Utah) sponsored an earlier Senate version (S. 2823). An amendment by Sen. Lamar Alexander (R-Tenn.) added Hatch’s name to the bill title. After the Senate passed its new version of the bill, Alexander said Senate lawmakers had stayed in touch with their House counterparts about changes to the measure.

Differences in Bills

Some of the changes in the Senate-passed bill involve the new sound recording rights for pre-1972 sound recordings, which currently are subject to a patchwork of state laws. Sen. Ron Wyden (D-Ore.) negotiated down the extension of the new rights until 2067 for all music issued from 1923 to 1972. The works now would enter the public domain between 95 and 110 years after publishing, depending on when they were recorded. The compromise also adds protection of noncommercial use by educators, scholars, libraries and archives if the copyright owner doesn’t object.

Digital music providers Sirius XM and Music Choice have opposed several parts of the bill. They secured one late change in the Senate that locked in royalty rates they pay under a digital-specific process until 2027. Previous versions forced them out of that separate, 1990s-created system into one for other media when their current rates, negotiated every 5 years, expire in 2022. In exchange, they agreed to drop a pending appeal of a recent 40 percent increase in their rates, according to Recording Industry Association of America president Mitch Glazier.

The digital companies also failed to repeal a long-existing traditional AM/FM radio exemption from federal requirements to pay sound recording royalties. Music industry groups and legislators who wanted to avoid contentious issues that could have undermined the bill pushed back against the heavy lobbying by Sirius.

“There were things we all wanted more at the end, but the senators crafted a compromise, and said we want everyone to give a little, and give up some things that they are not going to get. And that’s what happened,” Glazier said.

Content Creators Coalition and MusicAnswers, two groups representing songwriter interests, successfully pushed for two Senate changes to the new digital mechanical royalties collective. The Senate-passed bill would require the collective’s royalty database to be made public, and directs the collective to use best practices to track down recipients of uncollected royalties, generally for less prominent groups that might not know about their revenues.

Under another Senate change, the Department of Justice would have to notify Congress before terminating a consent decree—agreements between the U.S. and performance rights organizations that allow the sale of blanket performance rights licenses.