Passage Of Music Modernization Act Averts Artist Boycott Of Sirius XM
Yesterday the Music Modernization Act, a massive overhaul of the US copyright system, unanimously passed the Senate, and while good news for the music industry as a whole, one entity remains in opposition to the bill: SiriusXM. That said, the MMA's smooth passage will like prevent a major boycott of the satellite radio service by artists.
___________________________
Guest post by Bobby Owsinski of Music 3.0
The Music Modernization Act overhaul of music copyright passed the Senate unanimously yesterday, following the House of Representatives previous unanimous vote as well.
While this is excellent news for the industry, the bill must now go back to the House for approval since it was changed quite a bit from the original bill, then go to the President for his signature in order to become law.
The Music Modernization Act is actually a suite of bills that virtually everyone in the music business is for except for one major entity – Sirius XM. If the bill doesn’t become law for any reason (which appears to be a long shot at this point), that could potentially cause the service a lot of problems as 150 artists, songwriters, and companies have threatened a boycott if its opposition continues and it takes the bill down.
Major artists include Paul McCartney, Don Henley, Carole King, Katy Perry, Pink, Sia and producer Max Martin, who have all signed a letter to Sirius parent company Liberty Media outlining their strong feelings on the issue.
One of the major provisions of the bill is called the Classics Act that allows artists of songs that were produced prior to 1972 to finally get paid, and that’s what Sirius opposes. The reason? Money, of course, as it will end up costing the service big bucks.
Why 1972? That’s when the last big copyright reform bill occurred and it only pertained to songs released after that date. As a result, artists get paid for streams if their songs were released after 1972, but nothing for the songs released before that date. The Classics Act part of the Music Modernization Act will now right that wrong, although it doesn’t provide a provision for back pay for streams occurring since 1972.
If the worst should happen and these artists actually follow through on the boycott it could cause Sirius much pain. Sure, there’s plenty of alternative music the service still could play, but it will also put a big dent in some of the platform’s dedicated channels (The Beatles channel comes to mind).
With the rest of the industry and all of Congress now firmly behind this piece of legislation, the chances are that it will sail through the House again with few problems. If it doesn’t, Sirius could feel the wrath of the music business as many will feel that the failure of the bill sits squarely on the shoulders of the company’s efforts.
Click here to see the entire list of artists, songwriters and companies that signed the letter to Liberty Media.
Bobby, you misunderstand the objections to the MMA of SiriusXM. The problem with the CLASSICS act was minimal and was applied only to the funds that SiriusXM had paid as part of a court settlement to the pre-72 recording artists. Sirius wanted assurances that no more than half of what they had paid went to the record labels of the artists and the other half had gone to the recording artists.
The main problem with the MMA act according to Sirius was that it did not change the exemption of ordinary AM/FM radio from paying anything to the artists and record labels. Back in the old days, musicians were paid by a percentage of the sales of vinyl records, CDs and even digital downloads from iTunes.
In the era of streaming, there was no tangible CD to be sold and no revenue from the sales to be paid to the artists. So Congress decided that the recording artists should be paid by the broadcasters who earned a profit using the property of the recording artists.
But at that time, in the mid 1990s, they decided that only streaming or satellite channels should have to pay. No one really says why the AM/FM stations were exempt from having to pay. Most likely because Congress would have had to take on the powerful lobby of the radio stations, the NAB, Since the situation was not yet critical for recording artists, Congress probably thought it could punish the streaming stations, whom they associated with piracy at the time and worry about taking on the broadcast stations later.
Well, it has more than reached the time for the over-the-air stations to pay their share. Spotify and Pandora pay about 60% and 50% of their revenues right off the top to the record labels and recording artists. As a result, despite their popularity, neither Spotify nor Pandora has ever made an annual profit. They can not exist if by fairness AM/FM must pay as well.