There’s been a lot of discussion recently around the impact of streaming music on how artists are compensated for their work, given the overwhelming rise of services like Spotify and Apple Music. In a new development, the Orrin G. Hatch–Bob Goodlatte Music Modernization Act was signed into effect Oct. 11. It stands as one of the most important pieces of legislation regarding entertainment and copyright law, but the legal jargon can be difficult to follow for those who are unfamiliar with music industry standards.
The bill, which received bipartisan approval in Congress, impacts all creative rights holders and those who create music — but it affects industry giants much more than small Oberlin bands with music on Spotify.
“[The MMA] creates a blanket licensing system with collective administration, which will increase public consumption of licensed music, increase royalties paid out to rights holders, and promote licensing efficiencies,” wrote Julian Ring, OC ’16, who now works for Pandora, in an email to the Review. “The blanket license will empower existing on-demand streaming services to expand the catalogs made available to consumers to lawfully access the music they love. Pandora believes that the MMA brings the rules governing music into the 21st century, and represents a holistic improvement that will benefit the entire music ecosystem.”
The MMA sets a market standard for royalties, altering mechanical rights — streaming on platforms like Spotify and Apple Music — and performance rights, which include streaming on online radio like SiriusXM. Anyone with material on Spotify knows that each time their song is played, they receive abysmal compensation at a fraction of a cent — but this will change a bit with the MMA.
“I think there is a misconception that the MMA is going to make it feasible for anyone who makes music — if you’re not a big-time artist — to make money from your music,” said Daniel Markus, a double-degree fifth-year who researched the MMA for a music media class. “The musicians that this helps the most are the ones that already make the most money.”
This is true — because of their strong listening bases, recognized musicians and people who hold the rights to famous songs will benefit the most from the increase of mechanical royalties, making marginal increases in profit based on streams. Taylor Swift’s followers play her music more than followers of any Oberlin group — but musicians with smaller fanbases will still profit from making slightly more money per play.
The MMA represents the second progressive leap made by the music industry this year. In June, rights management organization SoundExchange introduced a new service to fight against copyright exploitation. Copyright owners were sent millions of Notice of Intention to Use filings, but the notices could not be tracked, resulting in an “Address Unknown” error wherein licensors did not have to pay royalties to the copyright owners after they’ve used the tracks. In an attempt to combat this, Sound Exchange created a central system to search for song copyrights and their holders.
The MMA builds on this system by doing away with the bulk of the NOI process. A Mechanical Licensing Committee, funded by digital service providers such as Spotify, will be created to provide public access to a database of song ownership information. This ensures songwriters and copyright holders will be identified for their work and paid appropriately. However, there will be a transition time between getting rid of the mass NOI issuance process and establishing a new database and licensing committee.
College sophomore Julian Kaufman is an independent artist who is featured in multiple projects, including MICHELLE and the booyah! kids, and has landed a placement on one of Spotify’s curated playlists.
“Higher royalties are nice,” he said. “It’s impossible to make money on streaming still, though.”
Kaufman interprets the MMA as an act to keep record labels relevant in a time when, prior to the MMA, decreased cost barriers to distributing music encouraged songwriters to publish independently in order to increase their royalties.
“The way I see it, the MMA is a move by big labels and promoters in the music industry to keep their jobs,” Kaufman said. “With the accessibility that exists now to get your songs on streaming and the lack of payouts for songwriters, it just makes sense for more people to become independent artists because they can own the rights to their masters.”
Indeed, it seems that the MMA represents a promise to the dominant players of the industry. Labels can now entice songwriters with higher royalties for their work, and publishers with the rights of famous works will have higher profits. Small artists can aspire to one day benefit to a larger degree from higher royalties — currently, touring is the largest source of income for middle-class musicians.
The Music Modernization Act is turning the labor of love into a more profitable source of income for established songwriters, artists, and rights holders. But we are living in a golden age of accessibility; gone are the necessities of labels and tremendous studio time expenses. For musicians in the Oberlin community, it is crucial to know about these changes in order to calibrate what they should be paid for their art — but regardless, they should remember the value of their own music.