MUSIC MODERNIZATION ACT UPDATES - STAY INFORMED!

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In celebration of Independence Day, NSAI will be closed beginning at 2:00pm on Wednesday, July 3 and will reopen on July 8th at 10:00am.

 

UPDATED 8/2/18 3:30PM

Songwriters, NMPA, and SESAC Announce Unconditional Support for Music Modernization Act

 
NASHVILLE, TENNESSEE – The Nashville Songwriters Association International (NSAI), the Songwriters of North America (SONA), the National Music Publishers’ Association (NMPA), and SESAC today announced they have agreed to work together to support the Music Modernization Act (MMA). 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 MMA improves how songwriters are paid by digital streaming services. The bill creates a single mechanical licensing entity which will establish an open, transparent copyright ownership database that will be overseen by music publishers and songwriters and paid for by digital services. 
 
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. 
 
All parties have enthusiastically agreed and respectfully request the Senate pass the MMA.
 
Nashville Songwriters Association International: “Reaching consensus within the music industry, on what may be the most important songwriter legislation in history, is a win for American songwriters and the broader music community. We are pleased to have put our differences behind us and support this bill in unanimous harmony. The Nashville Songwriters Association International has been a friend and fan of SESAC’s for decades and that is how our relationship will immediately resume.”
 
Songwriters of North America Executive Directors Michelle Lewis and Kay Hanley: “We are pleased to have come together with our partners SESAC, the NMPA, SONA and NSAI to move forward as a unified music community to support the successful passage and implementation of the much-needed Music Modernization Act. SONA would personally like to thank our partners, the NSAI and songwriter Ross Golan for their efforts and support in mobilizing the songwriter and artist community nationwide.” 
 
NMPA President & CEO David Israelite: “We are thrilled that we have mutually agreed on a path forward. 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.” 
 
SESAC Chairman & CEO John Josephson: “SESAC has been fighting for songwriters since 1931 and continues to do so with its enthusiastic support of the MMA. 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. 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.”

 

THE MUSIC MODERNIZATION ACT and the BLACKSTONE PROPOSAL

The Music Modernization Act (MMA) came about because the mechanical music licensing system is broken.

Many companies license songs and they don’t compare their data.  Therefore, inevitably bad data gets worse.  

The initial ownership information is wrong, splits add up to more than 100%, clerical errors occur, titles are not exact, song catalogues change hands, songwriters pass away and that is in the professional end of the music industry.  Think about finding info for literally tens of thousands of do-it-yourself songwriters and artists in the digital era who never have publishing deals.

It’s an impossible task.

This is the primary reason digital streaming companies are now willing to offer such significant gains for American songwriters.  They want to go to one place and get a blanket license.  In the Music Modernization Act, that place will be the Music Licensing Collective.

If a streaming company abides by the best practices of the MLC, including paying royalties to songs by their title when the owner is unknown, (money will be held in escrow while a search for the rightful owner happens), then they can no longer be sued for copyright infringement.  In exchange for these improvements and guarantees, they will give songwriters the following:

  • A willing buyer-willing seller market rate standard.  No longer will streaming mechanical royalty rates be tied to player piano rolls and copyright law from 1909.
  • They will pay ALL of the costs for the MLC and for the first time in global history, for streaming mechanicals, songwriters will receive 100 cents on the dollar.
  • Songwriters and music publishers will govern and operate the MLC -- getting unprecedented control over their own administration, collection and payment processes.
  •  A fair and efficient process for distributing unclaimed funds.  The songwriters’ share of this money will be based on their streaming activity for the distribution period AND even songwriters without publishing deals will be eligible through the MLC.
  • No-cost representation for songwriters and music publishers. 
  •  Elimination of the devastating government-run mass Notice of Intent (NOI) program.
  •  For the first time in history all mechanical song ownership information will be contained in ONE completely transparent database. 
  •  Major changes in the way ASCAP and BMI rate court judges are chosen and a fairer set of rules for how those judges determine streaming performance royalties.

 

The Music Modernization Act took many months to negotiate.  But just days before a final Senate vote, a proposal by Blackstone who owns SESAC/Harry Fox Agency, will significantly alter the most important songwriter legislation in decades.  They want the government to require that another layer is added to this carefully crafted process.  Their amendment would take vendor choices from the MLC and put those back into the hands of each streaming company who would be REQUIRED to also hire a “Certified Administrator” -- such as Harry Fox Agency to administer the licenses, collect and distribute the royalties.  Meanwhile, the MLC will still have to do the more difficult parts including responding to license requests, identifying unknown owners, administering unclaimed royalties and resolving disputes.

INSTEAD OF THE ROYALTIES RUNNING DIRECTLY THROUGH THE MUSIC LICENSING COLLECTIVE CONTROLLED BY SONGWRITERS AND PUBLISHERS—BLACKSTONE WANTS IT TO RUN THROUGH STREAMING COMPANIES AND HARRY FOX!!!! (This is the best explanation.)

 

Now the streaming companies would be back to dealing with multiple administrators and could notgo directly through the MLC.  Instead of unclaimed funds going directly to the MLC, digital services would have to transfer them from their books through a “Certified Administrator” and then to the collective.  This would mean delayed payments and no oversight on this money by the MLC through this stage. Instead of the songwriter/publisher run MLC providing master reports of royalty distributions to copyright owners, that job would go back to the streaming services costing the services money and with no oversight, adding to the probability of increasing inaccuracy.

SESAC insists their proposal will not add costs to songwriters,  but refuses to respond to inquiries of how that is even possible. Plus, every streaming company has said THEY WILL NOT SUPPORT the Blackstone proposal and WILL NOT PAY FOR IT!

Under the current MMA, Harry Fox and others can bid to do these jobs for the MLC.  Songwriters and music publishers have the power to decide who can do that most efficiently.  Under SESACS’s proposal that decision and authority goes back to the streaming companies. 

“Certified Administrators” are not required to be transparent, be completely or even partially governed by songwriters and music publishers and have no requirement whatsoever to represent songwriters without publishing deals at no cost!  The MLC does!

SESAC argues they are a private company that can sometimes achieve higher rates in the market.  We actually agree with them -- FOR PERFORMANCE ROYALTIES!  This has absolutely nothing to do with mechanical royalties which are set by Copyright Royalty Board judges who don’t even consider performance royalties.  Remember that it was NMPA and NSAI that just got songwriters and music publishers a 44% pay raise, the largest in history.  SESAC had NOTHING to do with that.

Blackstone/SESAC/Harry Fox allege that “evil corporate music publishers” have already chosen Sound Exchange as the MLC vendor.  This claim is impossible when the board that will make this decision cannot even be appointed until after the MMA is passed by Congress.

NMPA, NSAI and SONA have offered SESAC/Harry Fox a compromise.  Our offer includes:

  • Breaking vendor contracts with the new MLC into five topical areas, so there will be multiple opportunities to get business with the MLC. 
  • Specifying that contracts must be re-bid every five years, again an opportunity to get business with the MLC, IF you convince a board of songwriters and music publishers that you can do the job.  
  • Language that says you must have expertise in this business, another advantage for a company like Harry Fox.

This all boils down to who controls the money and the decisions.  Blackstone’s proposal gives that to collection companies and back to the streaming services.  NOT to songwriters and music publishers.  Their Blackstone-generated talking points sound reasonable until you examine these fundamental elements. THE ENTIRE BILL was to give songwriters control over their digital mechanical royalties!

Other erroneous media reports allege that this bill favors “tech giants” such as Amazon.  In fact, the MMA shifts vendor choices AWAY from tech companies to songwriters and music publishers.  It is the Blackstone proposal that returns vendor selection power back to the streaming companies.

They also that claim that somehow big publishers get an unfair "lump sum" payment of any unclaimed funds with no obligation to pay shares forward to songwriters based on the writers' activity.

Under the MMA, American songwriters get a fair and legal guarantee of how their unclaimed funds are handled. For the first time by law, those distributions will be based solely on activity and will be legally requiredto be shared with songwriters. AND for the first time, at NO cost, songwriters will receive unclaimed funds regardless of whether they have a publishing deal if they register their songs with the MLC!

Historically the term "market share" concerned songwriters.  Sometimes that did mean lump sum payments to music publishers.  That term is re-defined for songwriters in the MMA!!!! 

Wondering which side to believe?  Read the bill:

Section J, II

“Copyright owners’ payment shares for unclaimed accrued royalties for particular reporting periods shall be determined in a transparent and equitable manner based on data indicating the relative market sharesof such copyright owners as reflected by royalty payments made by digital music providers for covered activities for the periods in question”

Clearly this is NOT a lump sum, but a time-based activity payment.  Again, under MMA, royalty payments are based on streaming activity! To ensure this, NSAI and SONA insisted that the bill redundantly outline the activity-based methodology.  So, the bill repeats this under Section J which clearly states:

 “(I) such payments and credits to songwriters shall be allocated in proportion to reported usage of individual musical works by digital music providers during the reporting periods covered by the distribution from the mechanical licensing collective.”  

How much clearer can this be?  Distribution of unclaimed funds will be based on the number of times a writer’s song or songs were streamed.  "Market share" under the MMA is defined as activity!   This was one of the publisher's biggest compromises in drafting this legislation. The only company that NEVER worked to compromise was Blackstone/SESAC/Harry Fox Agency.  

HARRY FOX's proposal has the unclaimed funds going through THEM first, instead of the songwriter-publisher run MLC!

Finally, in addition to NSAI, these groups support the MMA legislation as written:

Administrators of Gospel Music, American Association of Independent Music, American Federation of Musicians, Americana Music Association, ASCAP, Association of Independent Music Publishers, BMI, Church Music Council, Church Music Publishers Association, Council of Music Creators, Digital Music Association, Internet Association, Music Managers Forum, Music Publishers Association (MPA), , Production Music Association, The Recording Academy The Recording Industry Association of America, Society of Composers and Lyricists, SAG-AFTRA, Songwriters of North America, SoundExchange, SX Works, and many more. 

NOT ONE of these groups agrees with SESAC’s proposal. Not one company represented by these organizations supports SESAC’s proposal.  Not even ONE other potential vendor supports their proposal.

Time has run out for this legislation.

This is a complicated topic and a multi-layered bill. So, let’s ask SESAC three questions:

1. If SESAC/Harry Fox has a better solution, why did they wait nearly two years to introduce this idea just before the final Senate vote on the Music Modernization Act?

2. They call the proposal a “middle ground” solution.  Then why do no other music or streaming organizations support their plan?

3. How can they justify their proposal when Amazon, Apple, Google, Pandora, Spotify and their representatives? The Internet Association and the Digital Media Association say they will not support the legislation if the Blackstone/SESAC/Harry Fox plan is attached and say in unison the would never pay for it?

Time has run out.  The fight has gotten ugly and NSAI takes no pleasure in battling within the music industry family.  But putting forth such a proposal only days before a final vote is in bad faith.  Nonetheless, we’ve extended an olive branch that is more than reasonable.  Let’s hope they accept it and understand their proposal will end what may well be the last Congressional opportunity to significantly help American songwriters.

 

 

VENDOR BUSINESS WITH THE MLC

CLAIM:The Blackstone/SESAC/Harry Fox Agency disinformation campaign continues. In a published article, "sources" claim that a "no-bid" contract has been engineered by music publishers to ensure that a certain company will get the vendor business of the new songwriter/publisher-run Music Licensing Collective.  

FACTS: A board of music publishers and songwriters -- that can't even be selected until AFTER the Music Modernization Act passes Congress -- will determine which vendor's are chosen. SESAC wants to accuse "big corporate publishers" in this ridiculous conspiracy theory, when in fact the majority of the MLC board seats will belong to independent music publishers and songwriters.  There are 14 board seats.  ONLY 3-4 major music publishers will have seats, depending on how you define that term.

As disgraceful as their behavior has been, to serve the interest of American songwriters -- and to ensure complete fairness when it comes to vendor choices for the MLC -- Blackstone/SESAC/Harry Fox have been offered language that would:

*          Categorize vendor contracts into five separate areas thereby guaranteeing more

            opportunities for vendors;

*          Stipulate that contracts are to be re-bid every 5 years; 

*          Require that to bid, vendors must have certain expertise.

All these things we have offered will give advantages to companies such as The Harry Fox Agency.   

Maybe fairness isn't enough for a big corporation like Blackstone when you believe you can bully Congress into guaranteeing your company gets the business. Are they making this wild claim because they waited until the last possible minute to try and KILL THE MMA?

REMEMBER: Their plan puts vendor decisions back into the hands of the streaming companies, NOT with songwriters. Songwriters/publishers should decide who will do the best job with our royalties!

 

 

UNCLAIMED FUNDS

CLAIM: The article also claims that somehow big publishers get an unfair "lump sum" payment of any unclaimed funds with no obligation to pay shares forward to songwriters based on the writers' activity.

FACTS:  Under the MMA, American songwriters get a fair and legal guarantee of how their unclaimed funds are handled. For the first time by law, those distributions will be based solely on activity and will be legally required to be shared with songwriters. AND for the first time, at NO cost, songwriters will receive unclaimed funds regardless of whether they have a publishing deal or not, if they register their songs with the MLC!

Historically the term "market share" concerned songwriters. Sometimes that did mean lump sum payments to music publishers.   THAT term is re-defined for songwriters in the MMA!!!!  

Wondering which side to believe?  Read the bill:

Section J, II

Copyright owners’ payment shares for unclaimed accrued royalties for particular reporting periods shall be determined in a transparent and equitable manner based on data indicating the relative market shares of such copyright owners as reflected by royalty payments made by digital music providers for covered activities for the periods in question.

Clearly this is NOT a lump sum, but a time-based activity payment. Again, under MMA, royalty payments are based on streaming activity! To ensure this, NSAI and SONA insisted that the bill redundantly outline the activity-based methodology.  So the bill repeats this under Section J which clearly states:

 “(I) such payments and credits to songwriters shall be allocated in proportion to reported usage of individual musical works by digital music providers during the reporting periods covered by the distribution from the mechanical licensing collective.  

How much clearer can this be?  Distribution of unclaimed funds will be based on the number of times a writer’s song or songs were streamed.  "Market share" under the MMA is defined as activity!   This was one of the publisher's biggest compromises in drafting this legislation. The only company that NEVER worked to compromise was Blackstone/SESAC/Harry Fox Agency.  

HARRY FOX's proposal has the unclaimed funds going through THEM first, instead of the songwriter/publisher run MLC!

 

 

 

 

WHY BLACKSTONE/HFA/SESAC PROPOSAL WILL KILL
MUSIC MODERNIZATION ACT


PLEASE HELP AND DO YOUR PART - CONTACT SESAC TO HELP SAVE THE
MUSIC MODERNIZATION ACT! (CONTACT INFO BELOW)


The Music Modernization Act (MMA) provides a simple answer to a very complex problem in music licensing. One of the main reasons the streaming companies have agreed to a fair rate standard that will likely result in a royalty hike for songwriters is efficiency; so they won’t have to go to a large number of multiple sources to obtain mechanical licenses.  Instead they will get one blanket license from the new Music Licensing Collective (MLC) run by songwriters and music publishers.

Blackstone’s (parent company for SESAC who purchased The Harry Fox Agency in 2015) proposal would legally require each streaming service to hire another company to issue licenses, collect and distribute royalties IN ADDITION to the MLC.  This added step would be costly to songwriters, who will pay NOTHING to the MLC and collect 100% of their royalties, because we’ve already negotiated with streaming companies to get them to pay the admin costs! 

This proposed amendment is an attempt to make sure The Harry Fox Agency keeps their current business by forcing the death of the MMA, or gets more business because their proposal FORCES streaming companies to hire an agency IN ADDITION to the MLC to issue and administrate mechanical licenses.

The Digital Media Association has said they will not support the Blackstone proposal, nor pay for it. Neither will music publishers, record companies, NSAI or anyone else who worked for years to create a bill that Blackstone is trying to kill at the very last minute.

Under the MMA, The Harry Fox Agency will have every opportunity to become a vendor and do business on behalf of the MLC if they prove they can do a good job, thus promoting efficiency and competition.  Instead, they want the government to REQUIRE and guarantee them business.

Blackstone owns both HFA and SESAC.  Concerned songwriters should CONTACT SESAC and ask them to withdraw this proposal and support the Music Modernization Act as drafted.  Call them at (615) 320-0055, email: licensing@sesac.com or tweet @SESAC to express your concern.  Tell Blackstone, SESAC, Harry Fox to work with us so together we can find a mutually agreeable solution and pass the most important songwriter legislation in decades. 

 

 

SONGWRITER GROUPS ASK BLACKSTONE, HFA, SESAC NOT TO KILL 

THE MUSIC MODERNIZATION ACT

 

Nashville, TN (July 23, 2018) -- The Music Modernization Act (MMA) is legislation that recently passed the full House of Representatives 415-0, was unanimously reported out of the Senate Judiciary Committee, and is currently being taken up by the full Senate. And there’s a reason the bill has received such overwhelming support in Congress: it is the product of literally years of negotiation between songwriters, music publishers, digital streaming companies, artists, record labels, performing rights societies, broadcasters and more. All stakeholders recognized that the marketplace in which we conduct our business is badly in need of reform, and while the negotiations were hard fought, ultimately all of the groups agreed on a bill that contains the most significant improvements for songwriters in decades.

 

But now, after years of work reaching an unprecedented agreement, the Blackstone Group, owners of the performing rights society SESAC and it mechanical rights arm The Harry Fox Agency, has proposed sweeping changes that would destroy the MMA and with it, all the benefits that it promises for songwriters. 

 

America’s largest songwriter advocacy organizations, the Nashville Songwriters Association International (NSAI) and Songwriters of North America (SONA) ask that Blackstone, SESAC and Harry Fox withdraw their proposal and immediately support the Music Modernization Act as drafted.  

 

Our groups participated in carefully crafting a bill that contains historic gains for songwriters and artists and will provide real economic benefits going forward. Among these are:

 

  • A critically needed new streaming mechanical royalty rate standard for songwriters;
  • Major changes in the way ASCAP and BMI rate court judges are chosen and how streaming performance royalties are determined;
  • A statutory guarantee of streaming royalty payments for artists’ songs recorded prior to 1972;
  • A streamlined process for producers and engineers to receive their digital royalties.

 

And most importantly, the legislation creates a single Music Licensing Collective (MLC) to oversee blanket digital mechanical licenses, collect the money from digital services, track the digital usage of songwriters’ worksand pay them accordingly. As proposed, The MLC will be overseen by a Board of publishers AND songwriters, a huge victory for us. We will have a voice in who collects our money and how they do it. Additionally, it will create a transparent song ownership database, a fair distribution process for unclaimed funds, and will eliminate the devastating government-run mass Notice of Intent (NOI) program. And, it will be paid for by the digital services themselves with no commissions charged to songwriters.

 

Blackstone, SESAC and Harry Fox have had months to review and suggest changes to this bill, to participate in the process with the rest of the industry in good faith. Their repeated message has been, “this bill is good for songwriters.  We are fine with it.”  Now at the last minute they are introducing what is essentially a poison pill. And while representatives of Blackstone claim they do not want to kill this landmark bill, what they are suggesting would do just that. If their proposal becomes part of the bill, NSAI and SONA would no longer be able to support the MMA which we’ve worked years to achieve.

 

Crucially, there is nothing in the current MMA legislation that precludes Harry Fox from applying to the MLC Board to provide the necessary services as a vendor, but they don’t want to have to compete for the job.  Rather, in an act of greed and callous disregard for American songwriters and recording artists, they are using their financial and political muscle for their own narrow corporate self-interest. 

 

The right thing to do would be for Blackstone, SESAC and Harry Fox to abandon any changes that would disintegrate support for the Music Modernization Act from an unprecedented collection of stakeholders and immediately call for its swift passage.  Otherwise, SESAC, Harry Fox Agency and Blackstone will bear responsibility for stopping the most important songwriter legislation in decades.

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