In the digital age, CDs and vinyl recordings have given way to downloads and streaming music services. To keep up with these new music delivery methods, Congress enacted the Orrin G. Hatch-Bob Goodlatte Music Modernization Act (MMA)—which was signed into law in October 2018—to make it easier for copyright holders to receive royalties for their musical works and sound recordings.
What Is the Music Modernization Act?
The Orrin G. Hatch–Bob Goodlatte Music Modernization Act (MMA), an amendment to the original U.S. copyright law, creates a new licensing system for digital music services that distribute musical works, provides federal protection for older sound recordings, and authorizes royalties for those who make creative contributions to sound recordings.
The MMA consists of three parts:
- Title I: The Musical Works Modernization Act (MWMA) creates a new blanket licensing system for songwriters and producers with copyrighted work to receive royalties for digital recordings from digital music providers (music streaming and downloading services).
- Title II: The Classics Protection and Access Act brings pre-1972 sound recordings partially into the federal copyright system. Owners of sound recordings fixed before February 15, 1972 now have a way to get paid for copyright infringement. Federal remedies for unauthorized use will be available for 95 years after the year of the first publication of the recording.
- Title III: The Allocations for Music Producers Act allows music producers, mixers, or sound engineers to receive royalties for the licensed use of individual sound recordings.
How Does the Music Registration Process Work?
There are two kinds of copyrights for music, each a separate part of the MMA:
- Title I: Musical works for music and lyrics in digital format.
- Title III: Sound recordings for musical, spoken, or other sounds in a recording medium (a CD or digital file, for example).
Title I for Musical Works
Anyone who uses a musical work must get a license directly from the copyright owner, use a licensing process set by law, or have an exemption, like fair use. Title I requires a new kind of license called a blanket (group) mechanical license to make and distribute musical works without the copyright holder’s permission. To get this license, the user must pay royalties to the copyright owner and give the owner an accounting of the use.
A license is an agreement between the owner of the copyrighted work and someone who wants to use it. A blanket mechanical license covers all the works of a specific copyright holder and gives permission to copy or distribute recordings of certain musical works.
The Mechanical Licensing Collective (MLC)
The MLC is a separate nonprofit (not part of the Copyright Office) that administers blanket mechanical licenses in the U.S. Copyright owners must sign up to be a member of the MLC and register their works to receive royalties through this system. The MLC, which opened for registrations on January 1, 2021, performs the following tasks:
- Receives notices and reports from digital music providers (like Spotify, etc.).
- Collects and distributes royalties to copyright holders.
- Identifies musical works and their owners for payment.
- Establishes and maintains a database with information on musical works and their owners.
Copyright owners aren’t required to use the MLC, and direct individual licenses are still allowed. The copyright owner can also affiliate with a performing rights organization, like ASCAP or BMI. Meanwhile, the cost of administering the MLC is paid for by digital music providers, not the copyright holders. Other organizations may charge for licensing musical works.
In order to ensure that their musical works are protected by copyright, individuals must formally copyright their music works or sound recordings with the U.S. Copyright Office. Registering with the MLC is a separate registration process that allows a copyright holder a specific way to receive royalties for digital works.
Title III for Sound Recordings
This part of the MMA has a similar process for music producers, mixers, or sound engineers to receive royalties from users of sound recordings. A designated collective (a separate nonprofit) called the Sound Exchange distributes those royalties under a letter of direction (instructions from the copyright holder) for individual sound recordings.
Exceptions to Blanket Mechanical Licenses
- Musical works that are physically distributed (like CDs or vinyl recordings) must still be licensed song-by-song.
- Spoken word works, like podcasts and comedy routines, are not considered “musical works.” They are protected by copyright but are subject to different licensing rules.
- Blanket licenses don’t apply to sound recordings; they must be registered separately.
New Group Registration of Musical Works
In addition to registering with the MLC or Sound Exchange, the Copyright Office has established a new copyright option called “Group Registration for Works on an Album of Music (GRAM).” This option allows applicants to register up to 20 musical works, or up to 20 sound recordings on an album of music, if the works are created by the same author or have at least one common author and if the claimant for each work in the group is the same. The final rule takes effect on March 26, 2021.
- The Music Modernization Act (MMA) allows copyright holders of musical works and sound recordings an optional, easier way to get royalties from licensees.
- To protect a musical work or sound recording, the creator must still file for copyright protection.
- To participate in the royalty process for groups musical works in digital format, a copyright holder may register with the Mechanical Licensing Collective (MLC).
- To participate in the royalty process for individual sound recordings, a copyright holder may register with the Sound Exchange.