Music Modernization Act

It may surprise you to learn that for many artists, every stream earns them less than half a cent per play. That’s less than half a penny. To break that down into terms a middle school-aged, CD-collecting music fanatic would understand: That’d require you to play a song approximately 2600 times on Spotify to amount to a $10 CD purchase. Artists wallets are taking a hit.

That is, until the Music Modernization Act, now known as the Orrin G. Hatch Music Modernization Act, that just passed through the Senate last week. A version of the bill passed the House earlier this year, in April. The Senate bill now returns to the House for that chamber to approve of the changes, and with the House’s approval, will be sent to President Donald Trump for his signature sometime before the end of this year.

While controversial, and not necessarily as revolutionary as many hoped, the potential new law is a massive, 185-page bill, that will change the payout and rights of modern music as we know it.

According to Billboard, the act dictates that several changes will be made in how rates for streaming royalties will be determined and paid. First, the act will create a license and collective that will set and determine the rate for royalty streaming. Previously, these rates were determined in court, and by two judges, who often favored the side of technology. Moving forward under the new act, there will be multiple judges under rotation who will decide rates and royalties for artists for streaming.

Currently, many online and subscription radio services like Sirius XM do not have to pay performers or sound-recording royalties for the broadcast of their music, although it does pay songwriters and publishers before 1972, simply because terrestrial radio does not. This will end under the new act.

Lastly, the act will eliminate the portion of the Digital Millennium Copyright Act of 1998 which rendered pre-existing digital services like Sirius XM or Music Choice exempt from additional considerations when rates are set for all right-holders in music.

While the act has many hoops to jump through to come into full effect, it’s definitely moved forward faster than anticipated, especially considering the lobbying efforts against the passage of the bill by huge music corporations such as Sirius XM.

This legislation could pave the path for more equal payouts for artists moving forward and would be an interesting development in the streaming era. This means when you actually listen to an artist, they’ll be able to feel your support!

What do you think? Should paychecks evolve alongside technology? Let us know on Twitter.