Here at “Sid Buck Records,” we aspire to not only learn about the “business” of the music industry but also share our insights with our fellow colleagues from the music industry, whether you are a sound engineer, composer, artist, or label. We look forward to a dialog with you about the MMA. Why is it that no one we have been speaking to in the industry for the past year has mentioned this to us, and we literally stumbled upon this ourselves? Well, below, we have tried to demystify this new landmark legislation for you. We would love to hear from you if you have opinions or want to add to this information in some way. Message us.
The Music Modernization Act (MMA) is a landmark piece of legislation that aims to modernize the music licensing and royalty collection process in the United States. The MMA was signed into law in 2018 and has since made significant changes to the way royalties are collected and distributed for digital music services.
One of the key provisions of the MMA is the establishment of a centralized mechanical licensing database called the Mechanical Licensing Collective (MLC), which is responsible for collecting and distributing mechanical royalties for digital music services. The MLC is designed to make it easier for songwriters and music publishers to collect the royalties they are owed for the use of their music.
In addition to that, there are new terms for royalty collection for sound engineers, remixers, and producers. The Act establishes a new right for sound engineers and producers to receive royalties for their contributions to sound recordings. This is a significant change, as previously, sound engineers and producers were not entitled to royalties for their work.
To get the royalties owed to them since the 1970s, creators who have been sound engineers must join a performing rights organization (PRO) such as ASCAP, BMI, or SESAC. These organizations collect and distribute performance royalties for their members. Additionally, creators may need to join SoundExchange, which collects and distributes digital performance royalties for sound recordings.
To ensure that they receive the royalties they are owed, creators should register their works with these organizations and keep accurate records of their contributions to sound recordings. By doing so, creators can ensure that they receive the compensation they deserve for their hard work and contributions to the music industry.
Are the royalties collected through a PRO different from SoundExchange you ask?
Well, the royalties collected through a performing rights organization (PRO) and SoundExchange are different in terms of the types of royalties and the rights they represent.
PROs, such as ASCAP, BMI, and SESAC, collect and distribute performance royalties for songwriters, composers, and music publishers. These royalties are generated whenever a song is publicly performed, such as on the radio, in a live performance, or on streaming services. PROs represent the public performance right, which is the right to perform a musical work publicly, and they collect royalties on behalf of their members for the use of their works.
On the other hand, SoundExchange collects and distributes digital performance royalties for sound recordings. These royalties are generated whenever a sound recording is played on digital platforms, such as satellite radio, internet radio, and streaming services. SoundExchange represents the digital performance right, which is the right to perform a sound recording publicly by means of digital audio transmission, and they collect royalties on behalf of the featured artist and the sound recording copyright owner.
In summary, PROs collect and distribute performance royalties for the public performance of musical works, while SoundExchange collects and distributes digital performance royalties for the public performance of sound recordings.
Does the sound engineer need an MLC account, and if so why?
Sound engineers, as well as other studio professionals like producers and mixers, do not need to create a Mechanical Licensing Collective (MLC) account. The MLC is primarily responsible for collecting and distributing mechanical royalties for songwriters and music publishers, not for sound engineers or other studio professionals.
However, under the Music Modernization Act, the MLC is responsible for collecting and distributing royalties for the newly established right for sound engineers and producers to receive royalties for their contributions to sound recordings. This means that if a sound engineer or producer has a royalty interest in a sound recording, they will receive royalties for their contributions when the recording is streamed on a digital service.
In order to receive these royalties, sound engineers and producers will need to ensure that they are properly credited as “featured artist” or “non-featured artist” in the metadata associated with the sound recording. This metadata includes information such as the names of the performers, songwriters, and producers, as well as the song title and album title. By ensuring that they are credited properly, sound engineers and producers can ensure that they receive the royalties they are owed for their contributions to sound recordings.
What if the sound engineer is not able to get a letter of direction signed by the artist? Do they have a minimum royalty percentage they are still owed?
If a sound engineer is not able to get a letter of direction signed by the artist, they may still be entitled to a minimum royalty percentage for their contributions to a sound recording. Under the Music Modernization Act (MMA), sound engineers and producers are entitled to receive royalties for their contributions to sound recordings, regardless of whether they have a direct contractual relationship with the artist.
The MMA establishes a default allocation of 2% of the revenue generated by the sound recording to be paid to non-featured performers, including sound engineers and producers. This means that if a sound engineer cannot obtain a letter of direction or negotiate a different royalty percentage with the artist or their representatives, they will still be entitled to receive at least 2% of the revenue generated by the sound recording.
However, it’s important to note that this default allocation is subject to change based on the terms of any applicable contract or agreement between the parties involved. Therefore, sound engineers should always aim to negotiate a fair royalty percentage and ensure that the terms of their agreement are clearly defined in writing, preferably through a contract or letter of agreement. This can help to avoid any disputes or confusion over royalty entitlements down the line.
Well, I hope that was enlightening to you readers; if you are still confused, then join the million other creators like us who are trying to uncover the truth. If only the “business” of music was as enjoyable as the “creation” of the music itself. Sigh !!