On Thursday, President Donald Trump signed the Music Modernization Act, a landmark copyright reform that musicians in Nashville, TN, have been advocating for many years.
What the act does for musicians and businesses is that it will create a new organization that will be in charge of the rising digital mechanical licensing of a song. This new organization will be run by producers and songwriters and will determine who the copyright owners are. The organization will also be in charge of paying the copyright owners their royalties when their songs are played through Apple, Spotify, etc.
Previously, this was up to the streaming companies and at some points, these companies would fail to properly license a song, which led to lawsuits in the millions and expensive settlements.
The new law will also create a new standard in the music industry by setting a digital royalty rate for songwriters and publishers, which will allow them to get paid more. This will allow for a more favorable free market value standard.
This law will close the loophole that allowed digital radio companies not to pay artists and their record labels royalties for songs recorded prior to 1972.
Mitch Glazier, the president of the Recording Industry Association of America, said to USA Today, “The Music Modernization Act is now the law of the land, and thousands of songwriters and artists are better for it.”