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Compromise reached to let Music Modernization Act march on

By | Published on Friday 3 August 2018

SESAC

The impasse that threatened to derail the Music Modernization Act in the US is at an end. Songwriter groups the Nashville Songwriters Association International and Songwriters Of North America have reached a compromise with the private equity firm that owns American collecting society SESAC and mechanical rights administrator the Harry Fox Agency.

There has been unprecedented collaboration between different music industry groups to try and get the copyright-law-reforming Music Modernization Act through Congress. But last week, as Senate continues to scrutinise the proposals, SESAC and HFA owner Blackstone was accused of some last minute meddling that could cause the coalition of MMA backers, which includes the streaming services, to fall apart.

Among other things, the MMA will set up a new collecting society that will be empowered to provide a blanket licence covering the mechanical rights in songs. This new society will be able to license song rights to streaming services wherever digital firms do not have direct deals with music publishers in place.

HFA is one of the companies that currently administrates mechanical royalties in the US under the pre-existing compulsory licence. Most people agree that the current system is all kinds of flawed, resulting in songwriters going unpaid and streaming services being sued. It’s hoped the MMA will go some way to fixing the issues. But HFA and its owner were, perhaps unsurprisingly, concerned that this will negatively impact on its business.

To that end, Blackstone proposed a late in the day amendment that enjoyed some support in Senate. But NSAI and SONA said that the amendment would make the alliance backing the MMA fall apart, causing the whole project to falter. They then encouraged songwriters to call for Blackstone to compromise. And especially those songwriters allied to SESAC, the performing rights organisation also owned by Blackstone.

Negotiations continued alongside all the hoo and the haa last week, and yesterday it was confirmed that a compromise had now been reached so that NSAI and SONA – and SESAC and HFA – could all back the current draft of the amended MMA. The National Music Publishers Association, a key player in driving the MMA forward, is also part of the compromise, which has also been welcomed by the Association Of Independent Music Publishers.

The NMPA, NSAI, SONA and SESAC said in a joint statement yesterday: “At the encouragement of senators deeply involved in the legislation and recognising the importance of the MMA for the future of the music industry, the parties have endorsed a provision under consideration by the Senate to amend the [new collecting society’s] administration of voluntary licenses outside the scope of the compulsory license in order to ensure private vendors can continue to participate in the music market, maintaining competition which is beneficial to songwriters and producers”.

The four groups said that they had now “enthusiastically agreed” the latest draft, and therefore “respectfully request the Senate pass the MMA”. Which is all lovely. And now some quotes…

NMPA CEO David Israelite: “We are THRILLED that we have mutually agreed on a path forward. We are stronger when our music family speaks with one voice and this agreement will allow us to come together to work towards the passage of the MMA. Songwriters need and deserve this bill. We thank the senators involved for their leadership and guidance.”

SESAC CEO John Josephson: “SESAC has been fighting for songwriters since 1931 and continues to do so with its enthusiastic support of the MMA. At the encouragement of senators closely involved in this legislation, all parties came together to agree on outstanding items related to the MMA including the reform of the … compulsory license and other important related matters. We share a collective responsibility to help ensure that the MMA benefits all stakeholders in the industry and look forward to the Senate’s consideration of the bill”.

Nashville Songwriters Association International: “Reaching consensus within the music industry, on what may be the most important songwriter legislation in history, is a win for American songwriters and the broader music community. We are pleased to have put our differences behind us and support this bill in unanimous harmony. The Nashville Songwriters Association International has been a friend and fan of SESAC’s for decades and that is how our relationship will immediately resume.”

Songwriters of North America: “We are pleased to have come together with our partners to move forward as a unified music community to support the successful passage and implementation of the much-needed Music Modernization Act. SONA would personally like to thank our partners, the NSAI and songwriter Ross Golan, for their efforts and support in mobilising the songwriter and artist community nationwide.”

Association Of Independent Music Publishers: “The AIMP applauds the NMPA and SESAC for coming to the table to move past their issues and confirming their unconditional support of the MMA. We hope that this clears the way for all senators to embrace the MMA and move this forward”.



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