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Trump Signs “Music Modernization Act” but the USA is still decades behind the rest of the world.

On the 11th October 2018, President Trump signed the Music Modernization Act (MMA), or the Orrin G. Hatch-Bob Goodlatte Music Modernization Act to give it it’s original full name.

It’s being hailed as groundbreaking and a landmark, and while it certainly is for the USA and performers from that country it is not an example of the USA leading the way, far from it. Everything in the bill is already law in Europe and has been for some time.

I’ve previously spoken about how far behind the USA was in terms of copyright laws and protections for creatives in a previous blog, with the biggest difference being America’s lack of a blanket license for all uses of music in commercial and/or public settings including terrestrial tv and radio, bars, shops and workplaces.

Not Paying Fair?

There has been a long-running campaign to get this changed, the “Fair Play, Fair Pay Act” was meant to do this and for a long time was part of the MMA, but many of the most important parts of it were removed before it was signed last Thursday.

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The MusicFIRST coalition, the driving force behind the Fair Play, Fair Pay Act, while happy about the signing of the MMA had this to say about the new laws.

“The MMA has pushed us into a new era, but we still have strides to make when it comes to ensuring fair compensation for music creators wherever their work is played. That means terrestrial AM/FM radio. Members of the musicFIRST Coalition are in discussions with the National Association of Broadcasters (NAB) to try to achieve this goal. And we must. The music environment is changing fast and its high time terrestrial radio in the U.S. joins nearly every country and begins compensating artists as equals and partners. So, while we celebrate this moment, our work is not done. Together, we will continue to work to harness the same enthusiasm that led to the MMA to strengthen the environment for music creators well into the future.”

So what exactly was still in the bill when it was signed?

What does it mean for musicians and writers in USA and how do the laws in the USA now compare to the rest of the world?

The bill allows performers from the USA to claim revenue on recordings made before 1972, for the first time ever.

In Europe performers can already receive revenue for recordings all the way back to 1948, as the copyright term for sound recordings is 70 years, and have been able to for many years now. Since 1998 in fact, when performers were granted the entitlement to “Equitable Remuneration” for their contributions, so this law while bringing USA closer in line with Europe, Canada and Mexico, it still shows that the USA is 20 years behind most of the world.

New Society

The bill also creates a mechanical copyright society tasked with collecting and distributing new revenue created by the bill. The UK has had a similar society, MCPS (mechanical copyright protection society) since 1924, so again the USA is 95 years behind in doing this.

The bill also, for the first time, allows producers in the USA to be paid a share of the revenue paid to the performers, something that is long overdue as in the modern music industry the producer is often one of the most integral creative contributors to a sound recording.

Until now they have been entitled to absolutely nothing for their work as producers and previously if they also performed on the track then being credited as a producer disqualified them from payment as a performer. Don’t ask me why. I have asked that question to SoundExchange many times without a satisfactory explanation.

However, this new law ends the confusion and allows producers to be paid their rightful share. Something European producers have been able to do for some time now.

Delay Effect

It’s also worth noting that for some reason this section, known as the “Allocation for Music Producers Act” (or AMP Act), has a delayed effective date so will not come into law until January 1, 2020. So not only is the USA once again behind the rest of the world, they have chosen to delay the remedy.

So, in summary, this bill does make huge strides forward for the music industry in the USA, but this not “groundbreaking” or “landmark” in terms of the global music industry.

As the MusicFIRST coalition put it, until “..the U.S. joins nearly every country and begins compensating artists as equals and partners” there is still work to be done.

You can read the full bill here.

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Why self-releasing artists shouldn’t always trust music industry information from the USA (…and why performers from the USA should be angry).

More often than not the information you find online about the music industry comes from the USA. The assumption is that America leads the way, so whatever is true for the USA will be pretty much the same around the world.

This is not true. In fact where music copyright law is concerned the USA actually lags far behind much of the rest of the world.
For example, The Berne Convention (for the Protection of Literary and Artistic Work), was first agreed in 1886 but wasn’t made part of US law until 1989, over a century later. So for over a hundred years, creatives from the USA were less protected than Europeans, and the citizens of their colonies.
USA’s main objection was concerning “moral rights”, which in Europe is the inalienable right to be credited for your work (or remain anonymous if you wish). It can’t be waived or sold only licensed.

Moral rights within US copyright law are much less specific. In some cases, a creator or performer will have no remuneration rights for their creation or performance beyond their initial fee. This means they are not entitled to any share of the license fees from that work.

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When in Rome…?

This was compounded by USA’s refusal to also agree to the Rome Convention (for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations), this was established in 1961 and gives performers on “phonograms” (which now covers all audio recordings) the right to remuneration even if they don’t own the sound recording and didn’t write or compose the song. More than half a century later the USA are still yet to agree to this.

What this means in practical terms is that performers from the USA earn just a fraction of the neighbouring rights royalties their European counterparts earn from the exact same recordings. For any US citizens reading this, you may be shocked to find out that both your neighbours Mexico and Canada have signed the Rome Convention. Performers from those countries are earning more than you in residual income for their work.

Play Fair

There is a push to change this with the proposed introduction of the Fair Play Fair Pay Act. This would finally bring the USA in line with the rest of the world and give the US music industry a much-needed boost. This income is worth around £125million a year in the UK for performers, so think how much it will be worth to performers in a much larger country like the USA. They face an uphill battle to get it passed and have failed numerous times before already, as this money will come from broadcasters, who will not want to see millions of dollars wiped off their bottom line each year.

You can register your support for the bill at the musicFIRST website or contact your member of Congress directly. 

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Neighbouring Rights

Neighbouring rights income, the money from licensing sound recordings to broadcasters and businesses, around the world is growing year on year. Even faster than the societies that actually collect the money predicted, this is helping the global music industry finds its feet again in the internet dominated world. Yet in the USA, this revenue barely exists.

The only mandatory license required to play sound recordings in the US is issued by SoundExchange. It is only required by “non-interactive web streaming” services, so basically just internet radio. This type of revenue (referred to as “digital royalties in the USA, and “new media” in the UK) makes up only a fraction (around 5%) of the neighbouring rights revenue in Europe. As the international collection deals set up by the various CMOs around the world is reciprocal, these societies will only pay US performers the same revenue that SoundExchange pays their performers. Once again robbing performers from the USA of 95% of their potential income.

Even when the laws are the same, the payment can still be different. Aside from neighbouring rights income for performers in the USA only including “digital royalties”, the split between the “featured” performers (the main artist or featured artist) and the “non-featured” (session musicians) is very different. In the UK session players share 35% of the performer revenue. In the USA they share just 10%.

Sample some of this…

In the USA, being sampled doesn’t constitute a performance. In Europe if you make any “audible contribution” (you can be heard in any way) on a sound recording then you are entitled to money for that, whether your performance was a sample or you attended the session in person. So again, performers in the US are missing out on revenue that performers in other countries can receive.

This is why the drummer of the most sampled drum break ever (“Amen Brother” by The Winstons) Gregory S. Coleman died homeless and broke in 2006. Neither he nor the writer of the song, Richard Lewis Spencer, received any money for the 1,862 documented times it was sampled. This is because the drumbeat wasn’t protected by composition copyright and the sample didn’t constitute a performance under US rules, also neither of them owned any part of the sound recording.

Had these performers been Canadian or Mexican (or from any “qualifying” country) they would have earned hundreds of thousands of dollars over the years. In fact, if they had even just recorded the track in either of those countries or simply became resident of those countries, they would also have been eligible for royalties under the Rome Convention. It wasn’t until a British DJ set up a GoFundMe campaign that they received anything for the impact their legendary recording had on future genres like hip hop and drum & bass.

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As a result of all these things, much of the commentary coming from the USA regarding the future of music industry and what money can be made may sound bleak. However, for someone in the UK, Europe and many other countries, it doesn’t reflect what is actually happening in their local industry.

Getting the facts straight

There are many studies on the global trends in the music industry, such as streaming subscription rates, the buying public’s view on the value of recorded music, and to what extent piracy affects the industry. Such as IFPI’s annual global music report which is a “134-page report with a detailed, analytical, and comprehensive picture of the key trends affecting today’s music business” it has a country by country breakdown of the statistics which give a clear picture of what’s happening around the world.

These studies show that while much of the music buying public in the US is unwilling to purchase music online or pay for streaming subscriptions, quite the opposite is true in Europe where reports show that a large percentage of people with premium streaming subscriptions also purchase physical formats. Australia is even more unusual, they lead the figures in both legal and illegal downloads of music which to me says they can’t get enough of it and will get it from wherever it is available.

Global Music Report 2017
So why don’t see more of these statistics reported?

Well, the full IFPI report costs £2250 (+20% VAT) as a PDF and up to £2900 (+20% VAT) if you want a hard copy and/or excel file. As you can imagine for many people writing about the music industry the cost is prohibitive, and they are left to source their own information, which will often be based on anecdotal evidence and unverified assumptions.

In summary, when you are looking for information about the music industry check where the information is coming from and if the same applies in your country.

With that in mind, I do always try to make a point of mentioning where aspects differ from country to country but this can get confusing as there are ways to get overseas laws to work for you even though you are a citizen of a country with conflicting laws.

So I will be writing some country-specific articles, to help you work out what applies to you and how you can make sure you get paid all that you are entitled to. If you subscribe now, you will get an alert when I publish the article relevant to your country of residence and/or citizenship.