Compromise on Music Modernization Act Leads to Unconditional Support From Music Industry Organizations

A collection of trade organizations representing music publishers and songwriters recently released a joint statement in which all announced unconditional support for S.2823, the Music Modernization Act (MMA). These organizations include SESAC, the National Music Publishers’ Association (NMPA), the Nashville Songwriters Association International (NSAI) and the Songwriters of North America (SONA). The support of the bill from these collective entities comes after an amendment to the act designed to improve private competition in the market for music licensing after a contentious period of negotiating that amendment.

The Music Modernization Act was first received in the U.S. Senate this April after the U.S. House of Representatives’ version of the bill passed by a 415-0 vote. A full vote by the Senate, however, had been held up because of objections from SESAC and the Harry Fox Agency, both owned by the global investment firm Blackstone. At issue was the bill’s proposed creation of a non-profit Mechanical Licensing Collective (MLC) that would offer and administer blanket licenses to digital streaming services as well as collect royalties from streaming services on a monthly basis. Such a collective would have taken away business from Harry Fox, a company already engaged in the administration of such licenses. While SESAC and Harry Fox supported the House version of the bill, they proposed amendments after the House passed the MMA meant to curtail the MLC’s licensing activities.

SESAC and Harry Fox’s opposition of the bill was poorly received by NSAI and SONA, both of which issued public statements charging SESAC and Harry Fox with trying to introduce a “poison pill” into the legislation. Many top songwriters, including Grammy winner Josh Kear and Grammy nominees James Abrahart and Shelly Peiken, publicly called for their colleagues at SESAC to resign from that organization over SESAC’s opposition to the bill.

Prior to the joint statement, the Senate version of the MMA was amended in terms of the MLC’s ability to administer voluntary licenses outside of the scope of compulsory licenses governed by 17 U.S.C. § 15, enabling private vendors the ability to continue participating in the music market. Under the terms of this compromise, the MLC will be responsible for identifying rights holders and administering licenses for digital streaming services while private entities like Harry Fox can continue negotiating music licenses for playback at restaurants, bars and radio stations without competition from the MLC. Further, while the MLC will administer blanket licenses to streaming services, Harry Fox and other vendors are able to negotiate one-on-one licenses with streaming services for music publishers which they represent. The joint SESAC/NSAI/SONA/NMPA statement notes that these compromises will “maintain[] competition which is beneficial to songwriters and producers.”

Individual statements from executives at these various trade organizations indicate that the war of words between them has subsided and that all parties are now on the same page. SESAC Chairman and CEO John Josephson was quoted as saying the following:

“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 Section 115 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.”

Likewise, SONA Executive Directors Michelle Lewis and Kay Handley offered this statement:

“We are pleased to have come together with our partners SESAC, the NMPA, SONA and NSAI 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 mobilizing the songwriter and artist community nationwide.”