February 05, 2020 Feature

An Economist’s View of the Music Modernization Act: Steps toward a More Market-Oriented Approach to Rate Setting

Chip Hunter

©2020. Published in Landslide, Vol. 12, No. 3, January/February 2020, by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association or the copyright holder.

The Music Modernization Act (MMA), signed into law in late 2018, provides for a range of new regulations and practices in the music business. This includes clarification of federal remedies for copyright infringement of sound recordings made before 1972, a new collective to handle royalty collection and distribution for compulsory mechanical licenses, and a means for potentially paying producers and engineers a portion of sound recording royalties collected under the statutory § 114 licenses.1 While many aspects of the MMA are interesting from an economist’s point of view, perhaps most interesting are those that move the standards and tools for rate setting closer to a market-oriented perspective in the context of digital uses of music. It is those developments that will be reviewed here.

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