How Does the Music Modernization Act Work?

The Orrin G. Hatch-Bob Goodlatte Music Modernization Act (MMA) was signed into law on October 11, 2018. The provisions of the MAA have overhauled several aspects of copyright legislation to better support songwriters and artists by updating royalty and licensing rules.

As an amendment to the original U.S. copyright law, the MMA creates a new licensing system for digital music services that distribute musical works, provides federal protection for past sound recordings, and authorizes royalties for those who make creative contributions to sound recordings. In other words, the signing of the MMA has modernized a crucial part of the music business, significantly improving the mechanics of the industry.

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In this newsletter:

Spotify's annual Loud & Clear report shares country-level data on artist remuneration, offering insights into digital music markets. Recently, it revealed that Spanish artists earned over €123 million ($133 million) in 2023, nearly quadrupling their 2017 earnings.

Three US lawmakers are concerned that Spotify's new bundling of music and audiobooks in its Premium tiers may reduce songwriter compensation, potentially undermining the 2018 Music Modernization Act's efforts for fairer pay.

Last year Megan Thee Stallion was accused of ripping off a 1999 track on her hit ‘Savage’. A lawsuit claimed that ‘Savage’ producer J White Did It had access to the earlier track via his manager. However, a judge ruled that there is insufficient evidence to prove that claim and dismissed the lawsuit.

Now, the details...

Exploration Weekly - June 21, 2024
Compiled by Ana Berberana

Royalties Generated by Spanish Artists on Spotify Exceeded $133M in 2023

In recent weeks, Spotify has been gradually releasing country-level data as part of its annual Loud & Clear music economics report, an initiative that it says makes it “the only streaming provider to share data on artist remuneration.” To be clear, that data is aggregate only (Spotify won’t tell you how much Bad Bunny earned in the UK last year, for example), and the data it provides isn’t always consistent – it provides one set of metrics for one country, and another set of metrics for another. Sometimes these metrics overlap, allowing for country-to-country comparisons, and sometimes they don’t. Nonetheless, the Loud & Clear data do give us an insight into the dynamics of various digital music markets that those of us who aren’t privy to the confidential data analyses of streaming services haven’t had before. In its latest release – and apparently its last national-level release for the year – Spotify has unveiled numbers on music streaming in Spain. One number jumps out: In 2023, the royalties generated by Spanish artists on Spotify exceeded EUR €123 million (USD $133 million at the average exchange rate for 2023). That’s almost quadruple the royalties generated by Spanish artists back in 2017.

Democrat and Republican Lawmakers Unite to Question Spotify Bundle Move That “Sharply Reduces Royalty Payments for Songwriters”

Three US lawmakers have expressed concern over Spotify‘s recent bundling practices and its potential impact on songwriter compensation. Spotify announced in March that it would reclassify its Premium tiers as ‘bundles’ by combining music and audiobooks. In 2022, a legal agreement (Phonorecords IV) allowed music streaming services in the US to pay lower royalties to publishers and songwriters for music offered as part of bundles compared to standalone music subscriptions. In a letter addressed to Shira Perlmutter, the US Register of Copyrights, Congressmen Ted Lieu (D) and Adam Schiff (D), plus Senator Marsha Blackburn (R), raised questions about whether Spotify’s new practice is in line with the spirit of the Music Modernization Act (MMA) of 2018. “American songwriters create the music we love but have long labored under a compulsory licensing system that robs them of control over their work and the ability to receive fair compensation. Six years ago, Congress passed the Music Modernization Act (MMA) to address that problem,” they wrote in the letter dated June 12. The bipartisan group of lawmakers highlighted the long-standing challenges faced by songwriters in receiving fair compensation under the compulsory licensing system, acknowledging that the MMA is a positive step towards fairer compensation for publishers and songwriters, while expressing concern that Spotify’s actions might undermine these efforts. Their concern lies in Spotify’s “unexpected decision” to reclassify its Premium subscription tier as a bundle when offering audiobooks as a free add-on to its $10.99 monthly subscription plan.

Megan Thee Stallion Song-Theft Lawsuit Dismissed

A New York court has dismissed a song-theft lawsuit filed against Megan Thee Stallion last year over her 2020 hit ‘Savage’. The judge hearing the case was not convinced by the theory for how the rapper’s producer, J White Did It, got access to - and then ripped off - a track called ‘It’s About To Be On’, which was made 20 years earlier. The creator of ‘It’s About To Be On’, James A Greene, said that White’s manager Klenord ‘Shaft’ Raphael was the connection between his track and the producer. However, judge Katherine Polk Failla concluded that, even when “generously construed”, Greene’s lawsuit did not provide “sufficient direct or circumstantial evidence” to support the claim that Megan Thee Stallion and her creative team had “reasonable access” to the earlier work. To demonstrate that a new song has infringed the copyright in an old song you need to do two things: prove the artists behind the new song had access to the old song, and that the two songs are sufficiently similar to constitute infringement. If you can show that the two songs are “so strikingly similar as to preclude the possibility of independent creation”, then a court might take access as a given, but that is hard to do. And, despite Greene’s best efforts, Polk Failla did not accept there was striking similarity between ‘It’s About To Be On’ and ‘Savage’. Therefore Greene had to show White had access to his track. ‘It’s About To Be On’ isn’t well known. Indeed, it isn’t even on the streaming services, having been made when digital music was in its infancy and only subsequently posted to YouTube. Therefore Greene needed to provide to the court a convincing ‘chain of events’ to explain how White had access to his track.

Feid Sued After Allegedly Using Producer’s Guitar Loops Without Credit and Compensation

Colombian artist Feid - also known as Ferxxo - and his label Universal Music have been sued for copyright infringement by a producer who claims that his guitar loops were used in three tracks without proper credit and compensation. That includes ‘Ferxxo 100’, the third single on Feid’s 2022 album, the somewhat ironically named - given the copyright dispute - ‘Feliz Cumpleaños Ferxxo Te Pirateamos El Álbum’ or ‘Happy Birthday Ferxxo We Pirated Your Album’. The producer, Sébastien Graux, says that his guitar loops have previously been used in tracks by the likes of Ricky Martin, Rema, NBA YoungBoy and Booba. His lawsuit explains how he met with the team at Columbia-based Icon Music during a trip to the country in 2021. They then introduced him to a producer called Jowan, who Graux subsequently met in Miami, where he shared several audio files containing his loops. Jowan was a producer on ‘Feliz Cumpleaños Ferxxo Te Pirateamos El Álbum’ and, following their meeting, Graux was told that his loops would be used on three tracks on Feid’s then upcoming album. He says that he was “ecstatic at the opportunity” to feature on Feid’s next record, and that he “looked forward to receiving a producer credit for his contributions” to the three songs: ‘Ferxxo 100’, ‘X20X’ and ‘De Tanto Chimbiar’. However, “despite months of reassurances from Jowan and others associated with defendants that Graux would be credited and compensated appropriately for his contributions”, no such credit or compensation has occurred since the album’s release in September 2022.

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