With a 415-0 vote of approval in the House of Representatives, many anticipated the Music Modernization Act (“MMA”) would achieve a similar, swift vote in the Senate and finally, we would see an update to archaic laws to reflect how artists and songwriters should get paid today. To nearly everyone’s surprise, however, it came to fruition that the opposition to the bill was vastly underestimated, even though the MMA is the first piece of legislation agreed upon by the major digital service providers, publishers, labels, and many artists and songwriters.
A major threat to derailing the MMA came from a huge industry player, SESAC, who tossed in a last minute amendment that openly and vigorously challenged a government-commissioned mechanical licensing body, when the same has long already existed. Harry Fox Agency (“HFA”), one such mechanical licensing group, just so happens to be owned by Blackstone Group, who coincidentally, owns SESAC as well. Thus, one could have anticipated SESAC/Harry Fox/Blackstone Group raising concerns over the MMA’s mechanical licensing provisions, particularly since implementation of same could effectively make HFA obsolete. However, SECAC/Blackstone’s counter-proposal was met with heavy pressure from the National Music Publishers Association (NMPA) and songwriters – a tough pill to swallow given HFA was sold to Blackstone by the NMPA, who supports passage of the MMA, including the creation of the MLC.
SESAC stated that its actions are not a last-minute effort to derail the MMA and that it has been actively participating in the legislative process all along. SESAC further stated that it never endorsed or supported the creation of a national monopoly to administer online rights, despite being continuously pressured to do so. SESAC feels its proposal is a compromise that accommodates all of the outcomes desired by the MMA’s stakeholders, especially songwriters. For example, SESAC proposes that independent Certified Administrators, chosen fairly based on history of delivering results to songwriters, should be assigned the task of administering and distributing royalties.
Besides the concern over the government-commissioned Mechanical Licensing Collective (“MLC”), other provisions giving rise to hesitation over the MMA, include stipulations that state that all claimed money collected by the MLC are redistributed to the industry’s largest music publishers after three years. The issue, however, is that these publishers may have no legitimate claim to the works effected by the release of such royalties, as the amount distributed is governed by marketshare. Further, it seems SoundExchange is being considered for management of the MLC, even though historically, they have had issue with matching royalties and many artists have seen their royalties plummet.
Additionally, a measure to align oldies with all other recording copyrights was introduced shortly after the House voted on the MMA. The Accessibility for Curators, Creators, Educators, Scholars and Society to Recordings Act (“ACCESS”) challenged the originally proposed CLASSICS Act (part of the broader MMA bill), but many contend it is a fair and reasonable compromise to the CLASSICS Act.
Where the MMA ends up is yet to be seen, but most industry players are hopeful it will be fair and reasonable to all those effected by its outcome.
Michelle is a Partner at Swanson, Martin & Bell, LLP and is licensed in Illinois and Indiana state and federal courts. With a Masters of Law in Intellectual Property, Michelle is the Vice Chair of the firm’s Entertainment and Media Practice Group and a member of the firm’s Intellectual Property Litigation and Transactional Services Practice Group. Her copyright and trademark practice focuses on intellectual property prosecution and related transactions, including performing trademark availability searches and providing advisory opinions, as well as preparing and filing trademark applications with the United States Patent and Trademark Office, and copyright registrations with the United States Copyright Office. Michelle also assists with the oversight of the firm’s extensive trademark docket and conducts required monitoring and maintenance of clients’ trademark portfolios, as well as provides clients with corporate counseling and innovative corporate solutions to address their respective needs. Michelle further provides comprehensive representation in the drafting, negotiating and executing of various entertainment-related contracts and licenses, including but not limited to band member agreements, artist management agreements, session player agreements, performance agreements, publishing agreements, sound engineer agreements, recording and personal services agreements, and licensing agreements. As a former artist manager, she has implemented many facets of national and regional tours, assembled benefit and charity concerts, communicated with various industry personnel, facilitated radio and internet publicity campaigns, arranged radio, print and internet interviews, and assisted in the development of press kits and websites promoting local talent. Michelle has also guest lectured on entertainment and intellectual property-related topics at The John Marshall Law School and the DePaul University College of Law, as well as served as a panelist on various other entertainment-related continuing legal education courses. Michelle has written for the ABA’s Entertainment & Sports Lawyer Journal and has also had numerous articles published by the Chicago Music Guide. In addition, Michelle serves as Chair of Swanson Martin & Bell, LLP’s Community Service/Pro Bono Committee and proudly volunteers her time as Vice President of the Associate Board and as a pro bono attorney to Lawyers for the Creative Arts, a non-profit organization that provides free legal services to eligible clients in all areas of the arts. She recently served as Chair of the Young Lawyers Division for the Illinois Association of Defense Trial Counsel, where she was recognized as the Rising Star recipient and received a Meritorious Service Award and President’s Commendation. She is currently serving on the Illinois Association of Defense Trial Counsel’s Board of Directors.
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