Pre-1972 Loophole, Musical Compensation Highlight Senate Copyright Hearing

Music icon Smokey Robinson and Nashville-based songwriter Josh Kear testified the situation has gotten dire for some musicians. The Miracles and Smokey Robinson’s pre-1972 recordings are played some 50,000 times a day on digital platforms, but the artists aren't compensated because of a copyright loophole, Robinson said: “An arbitrary date on the calendar [Feb. 15, 1972] should not be the arbiter of value.” Kear said since 2000, the number of professional Nashville songwriters has declined by 80 percent: “We have lost our entire middle class of songwriters.” He blamed the shift to the digital era and operating on outdated laws. The answers to the problem are in the MMA, he said.

Hatch’s bill mirrors legislation that passed unanimously in the House (see 1804250078), and senators repeatedly predicted the legislation will get similar support in the upper chamber (see 1805110056). “Music licensing issues are ripe for reform, and it’s my sincere hope that today’s discussion will start our process of moving this legislation forward here in the Senate,” said Chairman Chuck Grassley, R-Iowa. Sen. Amy Klobuchar, D-Minn., quoted Bob Dylan, saying, “Come senators, congressmen -- please heed the call,” and thanked Robinson for “shaking our windows and rattling our walls.”

The bill incorporates language from the Compensating Legacy Artists for Their Songs, Service and Important Contributions to Society (Classics) Act (S-2393) and the Allocation for Music Producers (Amp) Act (S-2625). SiriusXM opposed the Classics Act portion because it would make the service pay for use of all pre-1972 sound recordings. RIAA President Mitch Glazier testified some digital services agreed to pay pre-1972 recording royalties. Pandora and iHeartRadio are two, he said, though Pandora initially hesitated to pay, so it wouldn’t be at a competitive disadvantage with SiriusXM. Glazier said his organization is “thrilled” about the MMA. Hatch said the current framework is clearly disadvantageous for songwriters, noting every committee member who showed up was in favor of solving the issue.

The legislation would establish a mechanical licensing collective (MLC), creating a royalty payment database. National Music Publishers' Association CEO David Israelite said the database will be the first public-facing, transparent filing system, allowing anyone to see what the artist is owed. The collective’s board will have 14 members, including four published songwriters and 10 music publishers, to be appointed by songwriting and publishing groups, respectively. The Congressional Budget Office estimated expenditures by the MLC to average $30 million annually and total $227 million over a 2021-2028 period, according to congressional documents.

​​​​​​​DOJ appears to be considering whether music licensing consent decrees are still needed, including​​​​​​​ those requiring ASCAP and BMI to license their entire music catalogs (see 1804110056). The ASCAP and BMI consent decrees form the foundation for the public performance licensing market. Public Knowledge Policy Counsel Meredith Rose said the consent decrees reduce uncertainty, allow fairer negotiations and increase consumer access. DOJ concluded in 2016 that no changes were needed to the settlements, and Sen. Richard Blumenthal, D-Conn., suggested that conclusion remains justified, since nothing significant changed. He argued DOJ should keep the consent decrees while Congress legislates the issue. Sen. John Kennedy, R-La., said the music copyright system looks like “something I drew with my left hand. It just doesn’t make sense."