Chorus Of ‘Yeahs’ In House For Passage Of Music Copyright Bill.

Story by Inside Radio

It wasn’t even close as the U.S. House of Representatives on Wednesday unanimously approved a sweeping music copyright reform bill with a 415-0 vote. The Music Modernization Act (H.R. 5447) doesn’t include a performance royalty for AM/FM airplay however it does encompass provisions that could wind up costing the radio industry more for music use in the years to come.

“The major players in the music industry are unified in supporting comprehensive music licensing reform to bring the state of our nation’s copyright laws into the digital age that the industry itself has already transitioned to,” said House Judiciary Committee chair Bob Goodlatte (R-VA), who sponsored the bill. “While no bill is perfect, by all accounts, this is a bill with overwhelming consensus behind it.”

The bill includes a change in copyright law to create a public performance right for songs recorded prior to Feb. 15, 1972. That means any station that airs pre-’72 songs would have to begin paying royalties whenever those songs are streamed online. On-air spins would remain exempt. The impact wouldn’t be as severe as a blanket performance royalty, since that catalog material makes up a shrinking portion of radio playlists. But it could lead some classic rock or classic hits stations to adjust their playlists or stop webcasting altogether in order to limit streaming expenses.

The bill would also impact how the Copyright Royalty Board (CRB) sets broadcast radio’s ASCAP and BMI rates. Judges are currently not allowed to consider sound recording royalty rates as a relevant benchmark when setting performance royalty rates for songwriters and composers. The music industry argues that creates an uneven playing field which hurts songwriters.

To address that concern the bill would implement uniform rate setting standards to be used by the CRB for all music services. It would also bring an end to the current system whereby each performance rights organization is assigned to a single judge in U.S. District Court in New York when they’re unable to reach a deal with the radio industry. Instead, a federal judge would be selected at random. New York courts have been a favorable venue for radio but supporters of the change say the so-called “wheel” approach would ensure the judge takes a look at fresh evidence for each rate case, based on the record in that particular case, without relying on a lingering impression derived from prior cases.

No Radio Royalty Included

While an umbrella package of legislative proposals has passed the House, most notably for radio is lawmakers opted not to include the key element in the Fair Play Fair Pay Act (H.R. 1836) creating a performance royalty on AM/FM airplay. The Judiciary Committee has pushed the National Association of Broadcasters and the musicFirst Coalition to try to privately resolve the decades-long stalemate between the two industries and those discussions continue. Supporters of copyright reform chose not to wait to see how that process played out and potentially put passing the wider reform bill at risk of falling through cracks in the congressional calendar during an election year.

Rep. Jerrold Nadler (D-NY) made no mention that his radio royalty proposal was cut out when the Music Modernization Act came to the floor. Instead he said what did survive would resolve “longstanding inequities and inefficiencies” in the music marketplace. “We are at a unique moment in time where virtually all the industry stakeholders have come together in support of a common music policy agenda,” Nadler said, noting the measure has the support of more than 300 major artists. “This is an historic opportunity to accomplish something that hasn’t been done in decades,” Nadler added.

The NAB has remained neutral on the bill but it’s backed the proposal moving forward, saying it provides a “consensus solution” to music licensing issues facing songwriters, music publishers, and on-demand streaming services. NAB president Gordon Smith said they were also thankful key lawmakers were willing to work to “address the concerns” of broadcasters. Separately, Chris Israel, musicFirst’s executive director, called the vote an “historic day for music creators” but he also made no mention of the performance royalty issue.

At least one radio company supports the bill. In a statement iHeartMedia has called for “swift enactment” of the legislation. The parent of streaming radio service iHeartRadio said the House Judiciary Committee’s “collaborative, bipartisan and consensus-based process” resulted in legislation that “represents a significant step forward in creating a music marketplace that better serves and balances the interests of artists, music services and consumers.”

Had To Wait For The ‘Right Time’

The House vote was a significant accomplishment for Goodlatte, who has led the multiyear effort to update U.S. copyright law. Goodlatte announced he will retire at year-end and the weaving together of various proposals and legislation into a unified package with bipartisan support is seen as the music industry’s best opportunity in years to change how record labels, songwriters, and performers are paid. It comes just a month after the RIAA reported online music subscription service revenue topped $4 billion in 2017, accounting for nearly half of the industry’s $8.7 billion in revenue last year.

“Sometimes big pieces of legislation can come together only through the efforts of a large number of people who invest their time in making change happen—it also has to happen at the right time,” Goodlatte said. He noted the music industry needed to get past “an occasional bump” in order to bring songwriters, copyright owners, digital music providers, artists, artist guilds, and performing rights organizations together. “This bill fits right into the perfect sweet spot, on both timing and substance,” he said.

Rep. Doug Collins (R-GA) said near-unanimous support in the music industry for the legislation is remarkable, considering various factions wouldn’t even talk to one another about issues so contentious that some wondered whether they’d even be able to draft a bill. “They came together with overwhelming support and said this is where we need to be,” Collins said.

The bill now moves on to the Senate where companion legislation has already been introduced. Goodlatte said Wednesday he also believes President Trump will sign the bill.