From Copyright and Technology:
The music industry’s licensing problems just got another proposed governmental solution, with last week’s introduction in Congress of the Music Modernization Act (MMA). The MMA is a bipartisan bill that would provide a blanket mechanical license and set up a collecting society to manage payments to composers and publishers. It aims to solve a particular set of large and growing problems around mechanical licensing for streaming services like Spotify and Apple Music, both of which have been sued over allegedly unpaid mechanical royalties.
The problem the MMA aims to solve has to do with the current state of mechanical licenses and streaming music services. Whenever a user plays a track on a streaming service, the service has to determine which composition underlies the sound recording and pay mechanical (reproduction) royalties to songwriters and music publishers for that composition. Because record labels typically don’t supply information about underlying compositions, music services typically engage outside agencies — such as the Harry Fox Agency (HFA) and Music Reports Inc. (MRI) — to match recordings to compositions and manage royalty payments.
The recording-composition matching process is ultimately the streaming music services’ responsibility, and it’s prone to errors arising from bad or incomplete data.
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It also doesn’t help that there is no blanket license for mechanicals. For each sound recording that a music service wants to play, it must send a form called a Notice of Intention (NOI) to the composition rights holders, or if they aren’t known, to the U.S. Copyright Office. They must also account for mechanical royalties from each of billions of transactions every year. The result is a massive administrative headache and potential legal liability for the music services. (In contrast, broadcast radio stations get blanket licenses that allow them to play whatever music they want, secure in the knowledge that they won’t get sued and that performance rights collecting societies like ASCAP, BMI, and SESAC will do all the paperwork and pass payments on to rights holders.)
In its current form, the MMA provides a blanket license for mechanicals, meaning that streaming services would no longer have to identify rights holders or send NOIs. It also calls for a mechanical licensing agency to be established, to receive payments from music services according to transaction volume, match recordings to compositions, and disburse royalties to songwriters and music publishers.
Link to the rest at Copyright and Technology