On Monday the Congressional Internet Caucus Academy held a panel titled “In the Era of Streaming, Who’s the Bigger Music Mogul: Jay Z or Congress?” Part of the panel was about the Music Modernization Act, a complex, proposed law that sets up a new compensation mechanism for artists in the streaming environment. Prior to streaming, the system for paying artists was well established; ASCAP and BMI pay songwriters for the use of their work through an national auditing system of venues and broadcast stations while record companies pay artists a royalty on sales. If you are singer/songwriter you get pad from both sides. Straightforward.
Streaming doesn’t fit into either system, hence, the need for the Music Modernization Act.
Kevin Erickson, the director of the Future of Music Coalition (FMC), was brought into Congress to explain the complexities of the act. He brought puppets because he was told the representatives wanted an explanation dumbed down to a five year old level – PowerPoint was too sophisticated.
His presentation explained what you can read in the first paragraph using Sally, the songwriter puppet, who wants to take her music to market with the help of the publishing puppet and Ricky, the artist puppet, who works with a record label puppet. Ricky makes recordings and the record label puppet helps Ricky market his physical recording. He goes on to explain that for streaming, the Music Modernization Act establishes a new non-profit called the Mechanical Licensing Collective (M.L.C.). It will be set up to collect royalties from digital music streaming services such Spotify and Apple Music. The publishers will get paid by the M.L.C. and the publisher will then pay the artist. It really gets confusing when Kermit the Frog sings “It’s Not Easy Being Green.” Who gets the royalty – the puppet, the actor holding the puppet or the songwriter? MLC will sort it all out.