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The Music Industry Can’t Agree With Itself (Even When Congress Can)

The Music Modernization Act will go forward — but not without a headache that exemplifies the industry’s biggest problems

WASHINGTON, DC - APRIL 18:  Musicians Jimi Westbrook and Kimberly Schlapman of Little Big Town perform onstage during Grammys on the Hill Awards Dinner on April 18, 2018 in Washington, DC.  (Photo by Paul Morigi/WireImage for The Recording Academy)

The music industry has badgered Congress to consider the Music Modernization Act for years, and musicians like Little Big Town's Jimi Westbrook and Kimberly Schlapman performed on Capitol Hill earlier this year to show their support.

Paul Morigi/WireImage for The Recording Academy/Getty

A few weeks ago, Congress, in a rare event, was in near-complete agreement about something: passing the Music Modernization Act, a much-awaited bundle of legislation aimed at streamlining copyright rules and boosting songwriter payouts. But the bill was suddenly held up by the music industry itself.

The reason for the abrupt halt was a tangle of politics and financial quibbles. In short: While the bill sailed smoothly through the House of Representatives with a unanimous vote earlier this year, its once-certain passage in the Senate — the last step before landing on the president’s desk to be signed into law — was suddenly derailed by a last-minute amendment proposal from Blackstone, the private equity firm that owns SESAC, a performing rights organization that collects royalties for songwriters. SESAC bought the 91-year-old royalty-distribution company Harry Fox Agency in 2015; Blackstone bought SESAC in 2017. A key part of the Music Modernization Act sets up a new licensing system that, while making life in the rest of the industry easier, would take responsibility away from Harry Fox — so Blackstone intervened with a proposal to keep the agency intact and limit the new system’s scope.

Other music organizations responded with shock, saying such an amendment would cripple the innovation that the packaged bill was trying to push through. Two groups, Songwriters of North America and Nashville Songwriters Association International, accused Blackstone (and SESAC and Harry Fox) of trying “to disrupt the bill’s progress in the 11th hour,” while others called the proposal a “poison pill” and a number of outraged musicians demanded resignations from their SESAC-affiliated colleagues.

On Thursday afternoon, after weathering two weeks of public fury, SESAC released a statement in tandem with those two groups and the National Music Publishers’ Association saying that all of them have “agreed to work together” to support the MMA’s passage — apparently without the amendment. At “the encouragement of Senators deeply involved in the legislation and recognizing the importance of the MMA for the future of the music industry,” the parties have decided to all support the bill with its current idea of a new central licensing system. “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,” SESAC chairman and CEO John Josephson said in the statement.

But though the holdup on the bill was temporary, it exemplified some of the bigger issues plaguing the music business. One of those is the sheer intricacy of music’s payment system, which can often require a dozen different entities to issue licenses, collect fees, divvy them up among publishers and record labels and other rights holders, and then distribute them to artists and songwriters themselves.

“Hedge funds are accountable to their investors and are often looking to extract value. We need companies in music to contribute value” — Kevin Erickson, Future of Music Coalition

Competing interests among those groups get even thornier if some are overseen by profit-minded finance companies — as was the case with the MMA hiccup. “It does point to a broader problem: when large financial companies get involved in the music business, they need to have skin in the game to encourage sustainable systems that work better for everyone in the long run,” Kevin Erickson, national organizing director of the Future of Music Coalition, a nonprofit musician-advocacy group, tells Rolling Stone. “Hedge funds are accountable to their investors and are often looking to extract value. We need companies in music to contribute value and be accountable to musicians and songwriters who too often bear the impacts of other people’s risky bets.”

Blackstone and SESAC have not commented on why they chose to back down on the amendment — but highly visible pressure from musicians on social media likely played into the decision. “A lot of you are probably confused about seeing this SESAC bullshit the last few days,” Maren Morris tweeted last weekend. “As an artist, I see money that my fellow songwriters who don’t have touring/merch/etc ever get. I want THEIR voices and THEIR songs to make them and their families secure in the digital age.” Morris called SESAC’s amendment proposal “BS and insulting to their writers,” a sentiment that was echoed by dozens of other popular musicians.

The anger that emerged from artists during the weeks of holdup highlights another problem: Even though the bill is now back on track to pass into law, it will not be a silver bullet for all artists to magically make more money. The MMA accomplishes a fair amount in bringing ancient copyright law up to date for the streaming era; it doesn’t, however, grapple with any other problems in the recording and publishing industries, such as low digital stream payouts, unpaid royalties due to broken metadata or the mess that is the broadcast radio royalty system. “There are more problems that we are going to have to continue to wrestle with as an industry,” Erickson says, such as “ensuring the growth that we’ve seen in streaming meaningfully helps diverse creators sustain their careers rather than replicating the winner-takes-all dynamics of the past.” For now, all eyes are on the Senate, which is due to vote on the bill before the end of this year’s term.

“It’s not an easy topic to talk about money in any field. It’s what divides us,” Jason Mraz, one of the musicians who’s most eagerly advocated for the MMA by performing for Congress on Capitol Hill, tells Rolling Stone. “The Music Modernization Act will hopefully help stimulate the creative community. It’s a step in the right direction so we can finally organize all this scattered content and have a more harmonious understanding based on how much you’re going to get paid.”

In This Article: music industry, RSX

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