>> would our witnesses please be seated? >> you really have to bang that. trust me. [banging gavel] for being everybody here. as we have an opportunity to settle a lot of issues we have been finding, trying to find a solution or, for a long, long time. once again, good morning.

thanks for coming to our hearing on music policy and legislation to improve the current music licensing framework. today, industry stakeholders and artist will testify about how to protect and promote music creation of the 21st century. we are fortunate to have talented artist on the panel and several more in our audience. and we extend a warm welcome to all but particularly those who are here because of what you contributed to the society we have in america that benefits from our copyright laws and other protections. these laws have helped to make the united states a tremendous force of creativity and artistry in the music world. the exclusive rights and protections that are copyright

laws are the foundation upon andh america's careers artists stand and thrive. important that singers, songwriters, musicians, technical engineers, producers, and all the men and women who support the creativity and artistry behind american music be rewarded for their efforts and incentivized to continue producing their invaluable work. lives andches our inspires our world. every one of us has had a special song that touched our heart or linked to a fond memory. the magic of music has always been and will oh -- and will never change. but the way people enjoy and listen to their music has evolved. times have changed from the days

when people could not wait to get to their local record store or purchase their favorite album. music, theirtream favorite music, using services like amazon,'s not up by, pandora, apple music. music lovers can access their favorite songs anywhere at any time on a variety of devices. is thatcritical consumers are able to access their music legally and that our laws do not for people's ability to legally enjoy their music just do not thwart people's's ability to legal enjoy their music. the music industry has continued to adapt reflect tech logical development and changes in consumer references, the licensing framework, however, which governs the music industry, has not.

it's dead, the law has attempted to fight catch up as the industry has changed, resulting in a patchwork of music copyright and licensing laws that often fall short. the current statutory scheme thates inconsistent rules place certain technologies at a distant than such and result in and in affordable compensation variance for music creators. music copyright and licensing laws have been criticized for being too difficult to comply with and for not adequately rewarding the artist and professional create our music stu.there has been a lot of discussion how to improve the music licensing and copyright regime to the benefit of the stakeholders involved in the creation and distribution of music.

in the house of representatives, chairman goodlad of the judiciary committee held hearings on copyright issues including those affecting the music industry. we collaborated with many interested hearties, copyright expert in the copyright office to find a path forward for music licensing stuff multiple bills were introduced in both the house and senate. the songwriters, artists, publishers, producers, and distributors have coalesced around three bills introduced in both the house and senate will know,hese bills, as you are the music modernization act which among other things would create a mechanical licensing collective for all digital music so that streaming entities can compensate artists for their work. addhe next one would copyright protection or pre---

1972 sound recordings and three, the ampeg which would allow the payment of performance are these producers, mixers, and sound engineers of sound recordings. combinedgoodlatte ,ndustry bills into one package hr 54 47, the music modernization act, and was able to success late shepherd the comprehensive will through the house of representatives 415-0. in the senate, senator hatch, once chairman of this committee and now the present pro tem of the united states senate has introduced 2823 which contains identical text to the house passed bill. 70t bill currently has cosponsors including this senator and that's where we are today and that's why we are here today. a lot of hard work went into crafting and negotiating these three bills that were combined into comprehensive package

which, after which, there was more negotiation and compromise 2823.ting in the text of s- we have tried to reach consensus on what will work best for the music industry. some concerns remain. that's kind of natural around this place. i am hopeful that we can result outstanding concerns but i think the 415-0 vote in the house is instructive on how much support there is for this bill. most importantly, the package is supported by music stakeholders on both sides by digital service providers as well as music creators. they have coalesced around the comprehensive bill and i am encouraged by the momentum behind the unified package and the possibility of congress finally passing meaningful reform in this area.

today, we will hear from a diverse panel of witnesses including some very talented singers and songwriters. , what a pleasure having you here with us. a legend in your own right and you are on this panel and you bring great trustees to it. mr. roberts and mr. care, we are pleased to have you here as well. and let me also mention mary wilson of the supremes, darlene love, and carla redding. [laughter] who are in the audience and supporting this effort. we don't often have so much artistic talent in this room so we are lucky to have you all here as well. don't forget, he writes a lot of music here as well. i look forward to hearing from our panelists about how the music licensing system works for

creators and users and whether the legislation we have before us will help address problem's and whether there are issues or concerns weekend consider. -- we can consider. let me say that music licensing issues are ripe for reform and it's my sincere hope that today's discussion will start our process of moving this legislation forward here in the senate and getting it to the president. senator feinstein. [applause] >> thank you very much, mr. chairman and thank you for holding this important hearing. we have not had a chance, ladies and gentlemen, to hear copyright issues for several years because patent issues have been our main consideration. i have been on this committee a while. but i have never seen anything more difficult than the patent issue. i look forward to what senator grassley's said as being correct and that is that we may well

bills which some offer good solutions to these copyright issues. i am delighted to welcome another californian to this way over here is on the end, i think that's right started, and that's senator kamala harris. traditionhas a long of supporting creative arts. southern california is home to the music industry where countless young musicians, songwriters, vocalist, and composers have created music that is enjoyed all over this world. northerngrowth in california, there has, wellspring of new technology with innovative new companies developing apps and websites to deliver music to the public in ways never before possible or even thought about. technology is making it possible

for the small, independent singers and songwriters to bypass traditional channels entirely. but the laws governing how they get paid have not always kept pace. music may be a source of enjoyment or us, but for artists, it are livelihood. so it's important that singers and songwriters are paid fairly for their work. pass the ago, i helped digital performance rights and sound recording act. that was 1995, believe it or not. some of us have previously called for the adoption of a willing buyer, willing seller standard across all platforms that ensures that artists are paid fair market rates. i am proud to sponsor the amp act with senator grassley which would, for the first time, provide rural copyright

protection to the sound engineers and producers for the royalties to which they are entitled. i know smokey robinson is here but we will do a more formal introduction in a few moments. i want everybody to know that i am pleased to support legislation to ensure that artists are paid for their work that were recorded before 1972. one of the bills before us today would erase an arbitrary distinction under current law and provide the same copyright protections for digital streaming for all arches. -- for all arches. i strongly support establishing new blanket licenses that will make it easier for digital music companies to broadcast more music to larger audiences. at the same time, it's important we pass legislation that we don't create unintended

consequences. with the music modernization is delegating a government activity to a private entity and then establishing how that entity is controlled. this bill would give control over new collectives, to music publishers who already direct late license with digital music companies. whereas a comparable current model that is already in place, sound exchange, a successful music licensing entity, established by congress, has a 50/50 board structure. this bill also seeks to address what to do with unclaimed royalties when an artist cannot be found. it establishes that after three years, royalties that go unclaimed will be split 50/50

between music publishers and other songwriters. different songwriters than the ones do these royalties. i have heard some estimates that this could be -- that these unclaimed royalties could be as high as hundreds of millions of dollars. so this, indeed, is a very big deal and requires a good, long look. when looking at how to treat such a significant sum, we need to ensure that legislation does enough to find the songwriter who wrote the music and who has claimed to these royalties. are these individuals properly protected? are there sufficient incentives in place to find the people that the money belongs to? that is a great question that i have in mind -- in my mind. in conclusion, i support the general policies of all three

bills given that one of the bills we are considering is in response to mistakes that were made in earlier legislation. i believe we've got to perform our due diligence to ensure the legislation does not result in problems that would wreak wire and act of congress to fix. so holding this hearing is both important and a first step. so thank you, chairman grassley, i am pleased to be working with you to ensure that our singers and songwriters get what they deserve. >> normally we would introduce the witnesses but since senator hatch has laid it he role in this legislation -- has played such an important role as legislation, i will give the floor to him. >> i am pleased to discuss this legislation. as a songwriter myself, have a particular interest in ensuring that we have fair and well functioning music licensing laws that ensure songwriters are paid

nearly for their work. for too long, our licensing laws have disadvantaged content creators and so uncertainty. song by song licensing may have worked well in the days of player pianos are vinyl records but in the digital age where the catalog of music service like pandora or spotify or amazon or apple music runs into the millions of songs, it's no longer practical. that's why we have title our build the music modernization act. our bill will bring the music licensing laws into the 21st century to ensure that a songwriter is compensated fairly for their work and digital music services are able to operate without constant uncertainty. the bill already has 21 bipartisan cosponsors and i look forward to adding many more. i would be remiss if i did not thank the many groups and supporters who have brought us to this point. house 415-0sed the

late last month. it owes much to chairman bob goodlatte and representative doug collins'leadership stuff i'm grateful to our supporters in the senate as well. i think chairman leslie for joining me on our recently introduced package bill and for all he's done to ring this issue to the forefront. here is an essential voice, his is an essential voice in this conversation. i also thank ranking member feinstein for her leadership on strong act and are interest in this issue and no -- and no one knows better how radical music licensing is to her home state of california which houses both the recording industry and the tech industry that today brings music to so many of our homes. senator feinstein is a master legislator and i look over to working with her to move this legislation, which will do so

much for her home state industries, across the finish line. i would also like to thank senator whitehouse who has been with me on this journey from the beginning when we first set out to ensure songwriters were paid a fair market rate. senator kunz and kennedy likewise deserve recognition for their work on the classics act. i have been fortunate to partner with senator cowan's on a number of important bills these last few years. he really does know his stuff. senator kennedy is a rising star on our committee who is making important contributions in showing a serious interest in passing serious legislation. i would also like to thank senators harris, durbin, leahy, creepy, and lewis for cosponsoring the recently introduced package bill is whether others who have cosponsored prior versions. of course, he to thank senator alexander who was not honor committee but a very talented man and his leadership has been absolutely essential.

senator alexander truly understands the need for the music modernization act and has been a tireless advocate for this legislation. i want to thank you again, mr. chairman, for allowing me to make this short statement all stop >> we will: senator feinstein to introduce mr. robinson and senator harris, wanted to say a few words afterwards so proceed. >> thank you very much. i would like to just briefly introduce, on behalf of kamala harris and myself, some distinguished -- the whole committee, some distinguished californians joining us today. i'm so pleased to introduce smokey robinson. he is truly an american icon. while he was still in high school, he formed the group the miracles and gave us such hits as shop around, tears of a clown, and i second that emotion. his later solo work earned him a grammy for the song just to see

her. amassed 37nson has top 40 hits over the course of his illustrious career. he is the recipient of numerous accolades including the grammy living legend award, the kennedy center honors, and the national medal of arts award from the president of the united states. as a singer, songwriter, and producer, he is uniquely positioned to speak about the impact of all three of the bills we are discussing today. how the music modernization act will impact songwriters, how the classics act will impact singers and how the amop act will impact producers. smokey, we look forward to hearing what you have to say. i also want to recognize some additional great california singers in the audience. mary wilson, one of the founding

members of the supremes who was inducted into the rock and roll hall of fame of 1988, there she is. [laughter] it's great to welcome you, mary. love, also has been inducted into the rock 'n roll hall of aim and is listed in rolling stone's list of 100 greatest singers. let's see a wave. where is she? there she is all stop [applause] also with us and special for me dionnemmy award nominee warwick was only second only to aretha franklin for the most hits of any female vocalist of all time. would you stand and give a wave? [applause] there she is. course, carla redding andrews, daughter of the iconic

soul and r&b singer, otis redding and executive director of his own foundation. [applause] will yield to my colleague, senator harris. [applause] thank you, mr. chairman. senator feinstein, you are a prolific legislator and thank you. i am happy to be a part of this important discussion on how we will protect and promote music reagent for the 21st century. i think we can all agree that even though some of our best and greatest music comes from readers decades, that should not mean her music licensing laws should be in those previous decades. i am proud to join senator hatch, alexander, white house, wounds, durban, leahy and senator grassley to cosponsor bipartisan legislation to modernize how we compensate artists and is to be their music. the music modernization act will benefit both the artist who

produce today's hits and the innovative technology companies to bring that music to their fans. it is my great honor to introduce someone today who knows more than just about anyone about the music industry. he is a friend. is an incredible californian. he is in icon and he is the incredible smokey robinson. smokey was born and raised in detroit where he founded the miracles as a highschooler. it was smokey who suggested that berry gordy start motown records and smokey later spent several decades as vice president of motown. his songs were part of the soundtrack of our nation. shop around, my girl, tracks of my tears -- the sound of motown influenced everyone from the beatles to the civil rights movement. it's something that unites us as globe.ry and across the

and because of those incredible songs that we know and love, smokey has been inducted into both the rock 'n roll hall of fame and the songwriters hall of fame. he has received the grammy living legend award, the national medal of arts, the kennedy center honors, and the library of congress'gershwin prize among many other awards. and throughout his career, he has lit it is magnificent voice in support of civil rights and justice for all. so mr. chairman, if you will indulge me and their colleagues, i will ask that our colleagues vote in favor of this bill and bring music creation into the 21st century and if you will indulge me, i will ask that our colleagues second that emotion, thank you. [laughter] [applause] david is the president and

ceo of the national music publishers association, formerly chairman of the justice department's task force on intellectual property, serving as chief of staff for former bonn, earning a ba in political science and communication and jd university of missouri all stop meredith rose is a policy consult at public knowledge where she specializes intellectual property policy. she previously worked on consumer issues at the fcc, the transatlantic consumer dialogue, an a.b. in english-language and literature and a jd from the university of chicago. justin roberts's parents i know very well for 50 years is an award-winning singer/songwriter who has released 13 albums and

received three grammy nominations. mr. roberts currently serves as a trustee of the chicago chapter recording academy and runs harvard square records, an independent label based in chicago and he formerly, obviously, lived in iowa as i just indicated. chris harrison served as ceo of digital media association. previously, he served as vice president of music business affairs at sirius xm and vice president of his affairs at pandora. mr. harrison has a jd in political science from the university of north or alina. david delbecaro is the founder of music choice and previously he was the vice president of new business development at general instruments communication division. the division of aris

international and is the graduate of stanford with a bs and ms in industrial engineering. glaser president of the recording industry of america previously served as chief consult of intellectual property, house judiciary committee and practiced commercial litigation at a chicago law firm, a ds and social policy at northwestern university and jd at vanderbilt law school. nashville raced songwriter for big yellow dog music where he has built his reputation as one of the countries hit makers. is the only song writer to win country song of the year grammy three times and serves as an advocate for songwriters rights. we will gon and then

for might left to the right, go ahead all. >> ok, thank you senator grassley and ranking member feinstein, thank you so much and all the members of the committee here today. i want to say to you, senator feinstein, that those hundreds of millions of dollars you are looking for the writers, i claim mine today is the [laughter] herereally an honor to be and i am very happy to come and represent this proposal. title focus my remarks on to the music modernization act, the so-called classics act. as a member of the recording aftra, musicians who recorded before 1972 deserve to be compensated as those after

that date. add that iis, i will know a lot of musicians and havecers and writers who fallen on hard times and who could really use that money. it's a livelihood thing. it's not just about music, it's about lives so they could really use that money and i would like everybody to keep that in mind. fixclassics act designed to the quirk in the law that created this loophole. back in 1972, congress decided to protect sound earnings under federal law going forward. state law protected some recordings made before this. day when myk in the miracles records were sold back in stores but when digital radio team along in the late 1990's, thanks to senators hatch and leahy, congress passed a law so

artist and their labels were paid when their brick wordings were performed -- me and my fellow artists are thrilled. theas a great deal for digital radio companies, too. a single license to cover already earnings. no negotiation with every owner of ever recording. no need to ask permission to use it. a government set price, it was a win -- win. some digital radio companies lawyers follow -- filed a loophole. they asked, what if we don't pay for pre-1972 recordings under the new federal license because they are covered under the state law question mark then what if we argued that the laws are too old , the state laws are too old to cover digital radio westmark that would allow them to profit off of the most valuable rings of all time, paying legacy artists nothing at all. are avid of us who

radio listeners, i listen to radio all the time is ashley in my car, most of the music and program now, i would say at least 60%, is pre-1972 music. that should be taken into consideration. the 1950's and 1960's are called classic because of their age. also because of their greatness. he still resonate today. they defined the american sound. the financial value to the plays theseat recordings is clear and that's why there are dedicated channels on satellite radio like 50's and 60's and you get the idea because they are still planning that music which is attracting listeners to their stations. let me put this into perspective -- the miracles one of the first

acts signed motown in 1957 and rerecorded their first million selling hit, shop around, in 1960. i second that emotion in 1967 and tears of a clown in 1970. does happen to be some of the biggest records i have been and not payith and because prior to 1972 is ludicrous al. a lot of work went into making those songs from the artist to the musicians and the writers and the evil -- and the people, the producers who were involved in making them and they deserve to be compensated. paid when a i get digital radio service plays my you hit just being with from 1981 but under the federal law, me and my brothers in the miracles are not paid when they play any of our recordings. those recordings are valuable to these services.

altogether, the miracles and smokey robinson's recordings are streamed by folks who use the federal license over 50,000 times per day, every day. an arbitrary date on the calendar should not be the arbeiter of value. recognizet we can all the value of what we are trying to a conference today. it's very important and especially for me who knows these people personally who could use this. on thel going to bet night of february 14, 1972 and saying, tomorrow, i start making it count. [laughter] i don't believe the people of this country have ever made that distinction either. in fact, more than 3/5 of rolling stones top 500 songs of all-time were released before 1972. these records matter to people

and they matter to digital radio services. amount andn a proper attract listeners, it's only fair they should be paid. now, i recognize i have been lucky and i really have. not only have i been lucky that i have been very last because i am still able to perform and earn a living doing my craft and making records and so on and a fourth there are a lot of people and i mean a whole lot of them, who are not as blessed as i am to have a continuing career which allows them to still be earning money to that degree. and we need to take them into consideration because we just should, it's only right. for many, especially at this point in their careers, in their careers am a this is how they make ends meet.

that's very important. of course, a songwriter and producer -- as a songwriter and producer, i am told that the music modernization act is not about classic. it also includes mechanical , and aes, songwriters mechanism for music producers to be paid. it creates certainty and efficiency for digital services. it stops litigation and start cooperation. the legislation has brought together parties don't always see i do i but who see clearly the need for a fair and modern system that works for everyone. i would like to give special thanks to all the members of the committee supported comprehensive music legislation but especially senators kennedy, tillis, and booker who were the first to champion the classics.

my fellow songwriters, senator hatch, and senator whitehouse, chairman grassley and ranking member finds time, senators , just one second, cordon, lake, durban, harris, clover chair and leahy. thank you for your support on these important issues. this is an unparalleled tilling of accomplishment that comes from creating music. unparalleled accomplishment that comes from creating music, the reward of knowing the hours and ever that went into writing, recording, something that will truly make an impact on the world for generations to come. i wish for you all to share in that experience, to be creators of something innovative, constructive, and enduring.

something that will make a profound difference in the lives so many. the music modernization act will make that difference. thank you for making it a reality and i really appreciate everyone who is here and all of the senators who are supporting this particular act in this particular subject. it's very, very important. it would be like if you went to the grocery store or the supermarket and the owner was there and you said, ok, i'm going to get groceries from you for the next tenures years but i'm not going to pay you -- for the next 10 years but i'm not going to pay you. it's the same thing. when people create a business to make a living for themselves, they should be compensated for that and the music business is no different than that. if we stop paying people because it's only music, that's ludicrous.

their time and effort and creativity when into creating this music that people are getting pleasure from and listening to and having it for ever and ever and i don't think there should be a time limit on that . people will be creating music forever and those who have created in the past should not the not compensated for their works prior to 1972. i appreciate all of you, thank you. ie -- could -- that i ask each of the rest of you to stay within the allotted time because we are questions we want to ask? mr. israel, four minutes. chairman grassley and ranking member feinstein amends of the committee, i am a bit israelite and president and ceo of the national music publishers association which represents all music publishers and their songwriting partners in the unites its. songwriters are the most

essential members of the music industry yet they are often the least visible and the least compensated. they are also the most regulated small business in america. 75% of their property rights are regulated through compulsory licenses and rural government rate setting.it's true because of a world one euro law designed to regulate player p roles and world war ii era consent to these imposed by the justice department that never end. the results of this stifling government regulation is the value of songwriting has been diminished and songwriters are not paid anything that remotely resembles the economic and if it they provide to the commercial interests who use their songs. i am proud to be joined in the panel by my friend and one of america's best songwriters, josh care. i have the honor of presenting him with the first ever mpaa gold and platinum award for his

first hit song, before he cheats. it was the best-selling country song of all time. it has been streamed millions of times on digital music services yet last year, josh earned a $3000 in mechanical royalties from streaming. it is unacceptable for songwriters like josh to achieve such commercial success, to be prevented from seeing their fair share of that success. i believe songwriters should be in a free market but i also understand that removing the chains of a 1909 law and a 1941 consent decree would be opposed by those who pay songwriters and thus would have little chance of becoming law. if forced to live under these repressive government regulations, it's in the best interest for all that the compulsory licensing system by improving the licensing system, we can improve how much songwriters are paid, then this is a major step

forward. act wasc modernization conceived as a win-win for songwriters and digital services because of solves practical licensing challenges while also improving fairness and determining rates for songwriters. ma creates the first transparent copyright database paid for by digital services at no cost to the songwriters. digital music services often do not find the correct copyright owners and take advantage of a shortcut that allows them to use songs without paying properly. the mma replaces that process with a streamlined system allowing digital companies to use all music and pay fully. but the process by which songwriters are eight is not as important as how their songs are valued. in addition to improving has songwriters received the royalties, the mma improves the standard for calculating them. e also update how ascap and

bmi put up most affected case for their songwriters and publishers. if songwriters are to remain in a compulsory license prison, let's at least improve the conditions of their confinement. the mma past the house hadimously 415-0 because compromise and all sides and is a private sector solution to a government problem. it is the best hope to help songwriters living in extreme world is still regulated by a law designed her player piano rolls which is why the music community is asking the senate for its support. thank you. >> now miss rose. >> thank you, chairman grassley and ranking member feinstein and members of the committee for allowing me to testify. i'm here to focus on title ii of the classics act and the harm it would cause the copyright ecosystem as a whole. classics is a flawed and frankly

deeply controversial attempt to put a band-aid over one of the biggest gaping wounds in copyright law, namely the treatment of free 1972 sam recordings. i agree with mr. robinson that legacy artists are in desperate need of relief must be compensated for their work equal to their modern counterparts. contrary to many statements i have already heard put into the record, the classic act does not actually rent copyright protection to three 1972 sound recordings. it puts on an additional right on top of the already existing 1972 androunding before recordings. what nonprofit consumers, educators, and archives need is not a new federal right turn on top of the pile that a systematic and complete harmonization of these works with their modern counterparts. united states copyright office itself oppose the framework advanced by classics in its 2011 pre-19 72ng that

sound recording should either be part of the federal statutory scheme or they should not. said it would be a mistake to keep these works out of the public domain until 2067 when only a fraction have economic value, particularly when it would be a significant public benefit to make the others widely available for study and research. i have with me today, a 78 rpm record rest in 1929. there are many remarkable things about this record but i want to draw attention to a few. the grooves on this are actually pressed from shellac which is made by beetle resin. it is excessively brittle which makes this a difficult item to preserve in the absence of digitization. second, the overwhelming majority of the works best in this era have never made it to any subsequent format. they are only on 78 rpm records. this record contains a recording of a foxtrot called "there is a

girl in the blue ridge mountains" by a composer listed only as the name of moore. it's possible this is one of the few remaining captures of this recording left in existence. classics would actively prevent archives from preserving this record and making usefully available members of future generations. as you can also see down to the , classicse chart would also exacerbate the discrepancy in treatment between musical works and sound recordings. all other copyrighted works cratered in 1923 would enter the public domain 95 years after their publication. however, if enacted, classics would ensure a sound recording from that yours kept out of the public domain for 144 years after its creation. literally, no other copy or category of copyrighted work is locked away from the public domain for such a substantial amount of time, even modern sound recordings and joy short of protection. congressman is not exasperate --

exacerbate this. classics is not a consensus will.in addition to public is opposed by ill white era of nonprofit and nonindustrial users of recorded music including the library copyright alliance, the association of recorded sound collection and more than 40 intellectual property law professors from harvard, berkeley, stanford and others as an unnecessary and unreasonable impediment to preservation and access. congress should replaces with a bill that harmonizes these works with their modern counterparts, complete with the artist protection currently enjoyed by modern regarding orders or at a minimum, limit the term of protection to 95 years from the date of fixation. thank you and i look forward to your questions. >> now mr. roberts. > thank you. my name is justin roberts, i'm a grammy nominated children position and trustee of the recording academy. the recording academy is known internationally for the grammy awards but here in washington,

is known as the trade association that represents music's creators. the songwriters am a performers and studio professionals make music we all love. i thank you for inviting me to testify this morning alongside my aloha enemy members, smokey robinson and josh keer. while the academy members includes these wildly successful creators, many of our members, in fact most of america's music makers, just like me -- middle-class americans and songwriters who are not household names except in my case, maybe with certain 3-6 -year-olds. they bring their talent to the world. the least recognized among us are the music producers. is an importantg component of comprehensive music legislation. of us rely onmost the structure and steady hand and technical talent of a producer.

as a child growing up in des moines, iowa, i'm told in preschool that i love music so much i sat in front of the record player all day. my teacher tried to direct my love of music and do something more productive. clarinet inno and public schools, my love of music continue. i played in bands and eyes going college and pursued a career in music upon graduating. while working at a preschool in my early 20's, i writing songs for children and recording simple demos of the songs. i never thought of making a living as a children position until a producer, liam davis, convinced me to make a professional recording. he has been my freezer ever since as my 13 albums have grown , they have sold over 100,000 copies and garnered three grammy nominations. quincy jones once said that a producer's role is to capture lightning in a bottle. i guess the best way to demonstrate what a producer can do is to show you. a producer can take something like this -- and there's no doubt, there's

no doubt that schools out, schools out -- ♪ and turn it into this. doubt, there'so no doubt that schools out, schools out. , there's noubt doubt that schools out, schools out. ♪ ♪ >> the recording academy producers and engineers worked tirelessly and part of the effort with her landmark arrangement with sound exchange. at the direction of the artist, senator king pays royalties directly to producers even though they have no statutory right. we are grateful to sound exchange for this reader friendly approach but now we need protections for producers in the law. paying act codifies producers directly and creates a mechanism for a small royalty when the artist cannot be found. this bill is supported by every major organization representing music and has no opposition. one might expect reducers to ask commerce to pass the amp act on

it some but that would be a fondle -- a fundamental misunderstanding. nearly everyone associated with the creation of a record is behind us. the producer takes care of all the so it's no wonder they want to see the amp act passed so that songwriters and legacy artist receive their fair share. try an experiment -- listen to the 19 city nine version of the song " i second that emotion" by the supremes and attempt haitians. work of thehe producer and the vocals of mary wilson and enjoy the emotional truth in the songwriting by another -- by none other than smokey robinson. each contributor combined to make the classic trek and we ask you to pass this combined copper have the hill to protect all of the music makers who have given us so much, thank you. . >> thank you mr. roberts. now mr. harrison. >> thank you.

for inviting me here to testify. my name is chris harrison, the chief executive officer of the digital music -- media association or dma. our members include amazon, apple, google, microsoft am a napster, pandora, spotify youtube advocate for policies that promote him it -- innovation and distribution. hatch, whitetors house, alexander, kuhn's, chairman grassley and the other original cosponsors for 2823 for the mma. an identical bill passed out of the house in a unanimous form of 15-0 vote, a truly remarkable showing a bipartisan support for a long overdue music copyright reform. while the mma include several notable changes, my comments focus on the forms of section 115 of the copyright act. the current section 115 license does not work for songwriters, music publishers, or digital music dividers in the digital

streaming age. the mma, bike and get license and a newman michael licensing collective improves licensing efficiency and transparency and encourages digital music providers to invest more in creating compelling music experiences for consumers. with that support and encouragement of members of this committee along with members of the house judiciary committee, digital music dividers, music publishers and songwriters, came together in a spirit of compromise and cooperation to advocate a reform of section 115 that will benefit consumers, creators, and copyright owners alike. to working inard this quattro spear with members of this committee and the entire senate to move the mma forward. the music industry has been transformed by digital technology. in the earliest days of digital disruption, they were marred by music heresy and the climbing recording is revenue, legitimate and licensed digital music providers such as the ones

represented by dma invested in these new technologies to bring a wide righty of innovative consumershat provide with greater access, more choices, and better value. today's consumers of lawful access to a virtually unlimited catalog of music accessible across a multitude of devices. digital music dividers give artist greater creative freedom, provide valuable information about how consumers engage with their music, facilitate direct munication with their fans, and even sell tickets to upcoming concerts. after nearly two decades of declining revenues come a music streaming has saved the music industry as detailed in our recent report. music providers pay labels, artists, publishers and songwriters approximately $7 billion in royalties, accounting for nearly 80% of the total u.s. recorded music revenue. since interactive music streaming entered, piracy is

down 60%. the excesses appeared in spite of the license which does not meet the needs of the digital streaming era. antiquated procedures for utilizing section 115 dis-incentivizes digital music providers from investing in new products and services and discourages new market entrants. for music publishers and songwriters, the archaic price of -- process of issuing licenses has frustrated a timely and transparent payment of royalties. to solve these robins, the mma establishes a new like it license that will enable digital music providers to efficiently and transparently obtain the rights to reproduce and ,istribute musical works so-called mechanical rights, that are necessary to operate an interactive or on-demand music service. the mma ensures that these mechanical royalties will flow more link and more transparently to music publishers and songwriters. the mma also establishes a much-needed public ly

accessible database. thank you again for inviting me to testify today and we look over to working with you to see the mma is signed into law this year. >> thank you, chairman grassley, ranking member and members of the committee, thank you for inviting me to testify as ceo of music choice of the first and always digital music service which i started in 1987. i want to explain why section 103 which is added to the initial mma bill put us out of existence. this asou will delete it will save our company and is not in conflict with the original mma legislation. if you have a similar cable service, you may recognize that 50 or so to rated channels -- or iscurated channels, this part of your package. we are a small company with 70 million americans listen over 20 hours or wait.

a half-million in iowa, happily in utah, 7 million california, or million and taxes -- in texas to name a few. they come from middle income and multicultural homes. we agree parts of the music licensing system are broken and should be fixed at 103 eliminates the 801 b royalty rates from the copyright act. 801 b has been working successfully for many companies for over four decades including the record company to operated under the standard all the years. now that the record companies are low -- are no longer selling cds or demos on the they don't want 801b because it will squeeze the remaining radios or visit. 103 will subject companies to the newer willing buyer and seller standard. judges interpretation of the standard has been a disaster because this is not a free market. all licensees must contract with all three record companies and none of their music can be substituted for the others will

stop no consumer will listen to channels missing any of the huge huge catalogs. the result is rates so unreasonable that in over 20 years of licensee on the selling standard, not one of thousands of markets entered made money for a single year. i am here to ask that the committee remove 103, which will legislate our company out of business. unlike willing buyer, willing seller, it provides a broader range of evidence for setting rates. this flexibility can result in ratings increases. two recent decisions using 801 b increased serious by 40%. numerous companies have gone out of business, counting all companies there have been more profitable years under 801 b.

they not a subsidy rate, have never seen a rate high enough even though they are experiencing revenue growth and all streaming companies are not profitable. radio is exempt and streaming services invited to negotiate this bill negotiate direct licenses not subject to this process. 103 means they will be subject to a premarket rate in name only and has never led to a sustainable structure. 103 will result in artists the worse off because radio and record company research shows listening will ship to radio, which pays nothing. is the primary b concern but we recommend other improvements. shifting administrator costs of licensing collective onto licensees, is unprecedented in any market. this will make it difficult for smaller companies to enter the

market, stifling competition and leaving a few larger technology companies as the long run market participates. 114 license has been working without a problem for 20 years. please delete the provision prohibiting judges from considering administration fee and setting a mechanical rate. thank you. >> mr. fraser. >> good morning chairman grassley, sen. feinstein: members of the committee. i ammitch glaser and focusing on two parts of the bill. fixes thecs act problem that arose from a conflict between all laws and new technology resulting in discriminatory treatment, made before february 15, 1972. while most digital music services pay under a statutory license created by this committee for all music they play, including pre-1972

recordings, some companies have targeted classic recordings. they argue that they do not have to pay digitally perform classics because those recordings are subject to state protection and the license is a federal creature. they argue however that state laws do not apply to digital performance of the 1972 works. it is circular. it creates a windfall for digital services, at the expense of legacy artists and their labels. to illustrate the need for this new solution, lookout current practice has led to nonsensical results. some digital services refuse to pay to digitally perform frank way"ra's recording of "my but they do pay one for other versions. sid vicious in 1978. it does not make any sense. artist sued the services to

protect themselves in several states so they could receive just compensation. the result has been inconsistent, causing uncertainty for creators and digital services you may have to face lawsuits for actions in numerous states with no exceptions and limitations, potential damages and unclear rules on secondary liability. out of this uncertainty, classics of the mma was born. it is a practical, narrowly tailored solution with overwhelming support that doesn't extend or change the term of copyright that currently exists for works and that sets one set of rules for all. the music modernization act includes provisions to apply as , willing willing buyer seller rate stated that was -- rate20 years ago standard that was created 20 years ago. the rates for music should seek

to reflect the true competitive market to the greatest extent possible. the digital music association -- the music modernization act finally allows the industry to move forward. it does not discriminate based on the year the company came into existence, that encourages robust competition, it looks to the market as a benchmark for what creators should be paid and allows music and technology industries to move forward together. this bill is supported by americans for tax reform and the naacp. it is supported by the american conservative union. when does that happen? it contains common sense solutions and it's time has come. while there are some who want to use the momentum behind this bill is leverage to attach controversial provisions that reduce artist protections and where there will always be outliers on any legislation, there has never been such consensus on a copyright bill as

we have today. we have an opportunity to catch up legislatively to technological developments fundamentally altering our world. with your help, the music modernization act will ensure brilliant creators are rewarded for their genius and their indispensable value to our culture is recognized. thank you. >> thank you. >> good morning chairman grassley, ranking member feinstein and members of the committee. i am a songwriter and member of ascap. thank you for inviting me to testify as a voice for professional songwriters supporting the music modernization act. most of you have no idea who i am but i am part of a special community who works in the shadows of the spotlight to create music we all of. i wrote my first song about a crash i had on a girl in my high school english class and i knew i had found my calling. i have written thousands of songs, most of which will go

unheard. i was a 10 year, overnight hit by, in my first carrie underwood. now antebellum's need you was my late latest hit. while creating music is my passion, it is also my job. everyday, i office write song after song because hit songse or two these days does not forever pay the rent or feed the family. unlike recording artists, songwriters make no revenue off tors, merchandise or endorsement. a songwriter could make a decent income on sales of albums but that is a relic of the past. people do not buy music anymore, they stream it. public performance royalties which include streaming, are

our livelihoods. while streaming has increased the reach of music, our work is now valued less. we are talking fractions of pennies on the dollar due to outdated government regulations. this is why songwriters are asking for your help in washington. andongwriting colleagues myself have been too many offices over the years sharing struggles and ideas for bringing outdated laws into the digital age. finally we have momentum with the mma. i want to thank chairman grassley, senators hatch, alexander and white house, and all of you who have sponsored this bill, mma has provisions which will help creators have a fair chance for getting a fair deal. ascap ratel make proceedings essential by randomly assigning a judge to hear each case. of the repeal 114 i

copyright act, and will require judges to pay songwriters. canently, recording artists make up to eight times more than songwriters for the same performance. with the elimination of the loophole and the adoption of a willing buyer, willing seller standard will improve conditions for songwriters. while they wait for the situation to be resolved, we write. we write unspeakable truth, whimsical fiction, three minutes cream place, four-minute novels. the fears and dreams of childhood, the adolescent howl of our teenage years, the march of time, the wisdom of age. with your judicious assistance we will continue to write the soundtrack of all of our lives. the mma represents a historic coming together of stakeholders.

it is a truly comprehensive bill. reaching agreements between songwriters, publishers, record labels, streaming companies, artists and broadcasters is a colossal task. but we have achieved such a compromise. on behalf of american songwriters, i asked this committee to swiftly adopt this historic legislation. the time is now and songwriters, both present and future, depend on it. thank you. >> thanks to all of you for your outstanding testimony. i have two things i want to do before i start questioning. we have a series of letters here, about the legislation. without objection i would put them in the record. hearing no objection. senator hatch, when i get done asking my questions, will chair the hearing. i do that, number one so he is helping me get to another event,

number two, he should be doing it because of the respect he has of all the work you put into this bill. mr. harrison, i have questions about mechanical licensing collective. two questions. i will last them at the same time and the new answer. -- and then you answer. what are the digital media associations estimate of the costs of the new collective? our members concerned they will be responsible for excessive and unreasonable costs or does the bill prevent that from happening? the second question -- do you believe the oversight and accountability requirements in the bill are adequate or do you think they can be improved? >> it is difficult to know what the cost of operating the collective will be. we saw estimates come out of the cbo when revealing the house legislation that said the number

was between $20 million and $30 million a year. my members do not want to pay unnecessary cost. the way the bill is structured does provide opportunities for services to have visibility into how cost is determined. we have a nonvoting seat on the board. there is also provisions that allow the royalty judges to review cost when determining what administrative assessments are for digital providers. we do not view mma as writing a blank check. with respect to oversight and accountability -- there are a number of provisions in the bill that provide oversight. i mentioned the copyright royalty judges presiding over the collective cost is one. songwriters have the ability to audit collectives, the

collective has the ability to audit digital music providers. register of copyright has broad authority under subsection d 12. to the extent the register ecosystemart of the is not working efficiently or just barely, the register has the ability to promulgate rules to address those. having said that, our goal, dima 's goal is to have the reform enacted this year. we will continue to operate in a spirit of compromise that we have exhibited throughout the process and address concerns members have with legislation. i have questions about the board of directors created in the bill. three questions, all at once. have you expect board members of the new collective to be chosen?

who does that? how should interested parties expressed concern with anyone identified as a potential board member? event on thein the collective subcommittees -- or the legislation address that possibility and how? >> thank you. the way the initial board will be chosen is similar to how sound exchange came about. the music publishers will choose the publishers on the board. a collection of songwriter groups are choosing the four published songwriters that will represent them on the board. that board will then come up with operating rules of how to deal with succession, similar to how it is worked well sound exchange. for people who have concerns about the board, all legal rights remain available to anyone.

that was specifically put in the bill on purpose so we could make sure, in addition to the oversight that the copyright office has, federal court as a remedy, with regard to the question about the tie. entitycommittees on this halfhalf songwriter, publisher and they are listed as even. if the committee were to result in a tie, the full board would deal with any kind of a vote. >> senator feinstein? --following along with that is in the board evenly divided between artists and record labels 9-9? how does that solve the problem? >> know, senator. it is a 14 member board. self publishedr songwriters and 10 music publishers. it is even. >> is that the board of sound

exchange? >> no. sound exchange is not even divide. managers are on the board, creators. >> there is no board where there is an even divide? the problem is solved by the board? isthe board proposed by mma members.umber of 14 i cannot speak to sound exchange in the case of a tie. mitch, my staff, i have been trying to follow this in bill language which is difficult. on page 126 of the bill, what i was told is, your problem is solved or part of it is, by the language the copyright royalty judges shall establish rates and terms most clearly representing rates and terms that would have been negotiated in the

marketplace between a willing buyer and a willing seller. is that adequate language to handle what you are mentioning to us? reporter: it is. it has been around for 20 years, been applied by the royalty board many times. the importance of that language here, is that it actually will apply for the first time to both songwriters and artists, and it will apply across both licenses and to all services in both licenses. no longer will we have a patchwork of laws and standards based on when you came into existence or whether or not you get a special rate or whether or not if someone came in after you, they get the benefit -- >> the organization you represent is a happy camper? >> we are thrilled. it is about time. >> thank you. one problem solved.

would you go into the new copyright protections that the act gives two authors of works prior to 1972 so we all in simple english, so we all understand them? reporter: yes -- >> yes. it aligns with the current structure existing today. today, states protect pre-1972 works. it is clear states will protect the reproduction of those works for the time congress said they could do so. 15, 2026.uary classics does nothing to change that. if classics does not go into law, the term for those works 15,d still be february 2067. there is question about whether digital performances are currently covered in a consistent way. what this bill does is fill in the cracks. it aligns it right next to the rights and structure that exists

so there is no pyramid constitutional taking and you're rightsting reproduction that exist but you are allowing artists to benefit from digital performances in the same way that post 1972 artists are able to benefit. protectionsopyright in this are adequate? pre-1972 the determinations be made? how would you find people, that you have not found, what criteria are used? >> the compulsory license that currently exists for all digital radio services will apply to pre-1972 works. sound exchange, the agent that collects the money, will divide the money 50-50 between artists and record companies and their job is to find --

>> what would they legally -- i imagine this is subject to lawsuit. what in the bill do they have to do to meet the legal terms of the bill and not be subject to a lawsuit? state lawl preempts when it comes to digital performances. it aligns it under federal law subject to that compulsory license. they no longer have to worry about litigation in the states. that is the exchange in the bill. business certainty, lack of liability and licensing efficiency on one side, in exchange for various for the term of copyright. >> what kind of obligations do they have? what kind of a hunt do they have to make for people who would qualify? how do they know they are alive or producing or where they are? >> the services don't have to do a hunt. they report with a play and pay the rate to sound exchange. sound exchange has a team responsible for finding every

single artist that is owed royalties, whether post-1972 or pre-1972. >> thank you. >> thank you senator. i would like to start with you. i mentioned in my opening, current music licensing laws are disadvantaging songwriters. in what ways have the problems with the current licensing regime impacted you in your work and do you believe current licensing laws treat songwriters fairly? why or why not? >> i would love to address that. before i do -- i should probably take a moment and say, thank you. songwriters are fortunate to have someone, one of washington's finest as part of our community on the hill and we thank you for paying attention to our issues over the years. to address your concerns -- to answer your question -- as a

display of how songwriters are 2000, the since number of professional nashville songwriters has declined by 80%. lost our entire middle-class songwriters. they are gone. that statistic is due directly to the shift from the way we used to listen and acquire music, to the way we listen and enjoy music now in the digital era. the world has completely changed under our feet. we are still operating on old, outdated laws. our music is being used more than ever and valued less. the mma will specifically help outdated regulations and ensure fair outcomes for songwriters. i hope that answers the question. >> it does.

let me follow up. how can licensing laws be approved? what sorts of changes can we make to ensure that songwriters are paid a fair rate? the answers you're looking for, are in the mma. they are here in front of you now. >> you are satisfied? >> more than satisfied. mma will update outdated regulations. a couple examples of the way it will help songwriters specifically. we're going to gain rate reform with rotating judges that will hear cases and for the first time, they will be able to listen to all relevant evidence in cases, including what artists are paid for the same usage. we will receive mechanical licensing reform. we're going to update laws written in 1909, to regulate

player pianos that are still regulating a huge amount of songwriter revenue today. just as importantly, as what it is doing -- the way it is doing it. i have been in the many of your offices, my fellow songwriters have been in many offices over the years. we keep hearing the same thing over and over. we know this is outdated and wrong but what we really need from you is a consensus bill. we need you to bring us something where the creative community and the tech community come together. that is what this is. for the first time since we have been coming to you, we have a situation where, real help can come without having to fight further battles with the tech community.

andse, i beg you, pass mma bring us the relief we have been asking for. >> thank you so much. music licensing is an incredibly complex subject with all sorts of jargon, technical mumbo-jumbo. can you explain to the committee, what the key problems are in current licensing law and how the music modernization act fixes those problems? >> i will do my best in a short time, senator. songwriters make their money in three ways. mechanical reproduction, used to be sales of copies. public performance, used to be just radio. they have synchronization, when you married the song with video. a movie or tv show. that their part is not regulated by law, it is a free market right. songwriters do well when they are paid for synchronization. the first is what is broken. mechanical -- we are licensing in a system built for licensing

individual albums, 10 at a time and using it to empower digital companies to put up 40 million songs overnight. it does not work. it has led to lawsuit, lost revenue. this will fix the problem and do so in a trade allowing songwriters to get more money in exchange for helping digital companies fix the way they license. on the performance side, because of consent decrees that never end, since 1979 the justice department has had everyone sunset between 10 years. this did not apply to 1941 consent decrees. partieshelp, it gives living under these degrees since 1941 the ability to put on a case in court and to have a fair trial in front of a new judge. for those ways, songwriters are helped by the bill. >> thank you so much. that is very clear. >> center counsel. >> thank you, senator hatch.

i want to say thank you so much for being such a great leader in intellectual property. it is an classic and honor to join with you in this legislation. as someone who is himself a songwriter, we needed your leadership to pull this resolution together and move forward today. two chairman grassley, senator feinstein, senator whitehouse, senator kennedy, it is been an honor to play a part in trying to move forward with this complex legislation. as the entire panel has just detailed. this is a complex area. for most of us, music is a magical part of our lives. smokey, as i was studying for the bar, there was a little tape in my honda that i listened to every day, that had some of your most beautiful classic songs on it that inspired me and kept me going and lifted me up. dionne warwick has been with us today.

we have had folks from the supremes. were literally the soundtrack of my life and they inspire me and lifted me up. [laughter] the day we get to say, i love you back and forth to smokey robinson and a hearing is a good day. >> or the day we ever say that at all. [applause] >> i will also say when digital services came out, spotify, pandora, downloading, that seemed magical as well. when i became a senator eight years ago, ia started taking meetings with songwriters, singers, publishers, sound engineers, digital innovation committees, these were badly misaligned. there was a thicket of issues around these badly outdated consent decrees and laws were incredibly complex in this area, and as you just shared with us, the folks who were losing with a

creative community. songwriters and singers were not being compensated fairly and there was not any path toward resolution. we should take a moment senator hatch and other members, and recognize we have in front of us, a chance for the senate to solve a long-standing problem. it is not a perfect solution. it does not address every question. it moves this forward. i will focus on the classics act. i first introduced it with senator kennedy, it was our first bill together as a standalone. i was concerned about fixing a loophole in federal law that has kept artists, pre-1972 recordings from receiving loyalties when music is enjoyed. smokey, you said 50,000 times a day, your recordings are being enjoyed on digital platforms but without your being compensated. some of your biggest hits are pre-1972. i second that emotion, so

powerful, it is playing in my head as we are talking. could you start mr. robinson by saying, what with the passage of the classics act mean for pre-1972 artists and what would you say to those who say this is for record labels and doesn't help artists? >> it would mean a great deal. you are talking about people writing and producing and doing musical things before 1972 which means now, they are up in age. your chances to make another living for yourself or get another kind of job, when music has been your life, inspiring to me because, what if i want to retire? what if i do not want to perform anymore? upon,ome that i depended other than that, as far as writing and producing in whatever, has dwindled to nothing.

who were recording before 1972 are at an age, where that is more important to them than ever. >> thank you. >> you are trying to wind down. that is very important. >> thank you. fairly compensating those who made these iconic recordings -- a big motivation for me. if i might, two questions. criticisms and concerns we have heard raised today about the classics act, suggest the bill will shrink works available in public domain and give pre-1972 recordings protections for far too long. is that accurate? how would you respond? how would you suggest we not be the perfect -- we not let the perfect be the enemy of the good in this legislation? >> absolutely not accurate. congress beside what the term of

pre-1972 recordings would be in 1996 and 1998. there were many groups that did not like the term that congress decided and they challenged it and took it to court and the court upheld what congress decided. classics doesn't change what congress decided. the term was set a long time ago. the problem is not the term. the problem is, the law surrounding copyright is behind technology. set,g term, that congress artists are not able to get the rewards they were promised for that term. there are some, that never liked that term, who want to use the fact that artists need to be paid as leverage, to have a redo and retroactively try to shorten the term and to send things into the public domain early before the congress said, they would be thrown into the public domain. the great thing about this bill

-- it does something that has not been done before. it applies the exceptions and limitations that don't necessarily apply in that term, in the states and it applies it to digital performances, archives, lack of liability, all of those fair use. it is a win win win. >> thank you. in closing, i want to repeat a comment. there is compromise on all sides, this is a bill that can move us forward. i hope we will pass this before turning to other issues that face the music industry. i hope we can make progress together. thank you so much for your leadership on this senator hatch. >> thank you. senator kennedy. >> thank you, mr. chairman. let me associate myself with remarks my colleague, senator kunz, he was eloquent and as you can tell, he is very passionate about this issue.

he and many others including senator hatch, have worked hard on the subject. brought a tear to my eye. not the tears of a clown. [laughter] [applause] kilis, whobe senator you have not met yet. [laughter] who doesn't know his way to santa fe, i can assure you. [laughter] a smart person once said, art makes us more humane. ourselves andnd lose ourselves at the same time. a civilizede society if you do not appreciate and protect art and artists. now, both we have public and private system, looks like something i have tried to

draw with my left hand. it makes no sense. bill, is the amalgamation of three bills, the classics act, the amp act, and the music modernization act. it is not perfect. as some of you pointed out. singers,artists, songwriters, engineers, producers, the digital music industry. ,ecause our world has changed the world of music, has changed as well. let me ask a question. what digital music companies right now are paying pre-1972 artists? thousands of

digital music services that, unlike some of the few -- >> the main ones? now, iheart in pandora, subject to litigation originally, came to the table to negotiate this bill as a solution to move parties together so they could have business certainty. they have pledged, to move forward to pay pre-1972 artists. there are also thousands of smaller companies who use federal license and who said, we know there was no intent to find a gap. there are a couple big ones, who had clever lawyers, who brought us to this place today. >> who are they? >> sirius xm is the major one.

>> they did not pay the 1972 artists? they chose to litigate? >> they chose to litigate. >> who else? >> pandora at the time was the other major service who decided not to pay, mainly because their competitor, didn't pay and they did not want to be at a disadvantage. hugeen them, they get a overwhelming percentage of royalties that go to pre-1972 artists under compulsory license, which is why artists had to go to states courts to protect themselves. what royalties are paid to post 1972 artists? how is that computed? >> the copyright royalty board sets those rates for different types of services. internet services that pay under a willing buyer, willing seller

standard have to pay a percentage of revenue. they report songs that play. they write a check to sound exchange, in charge of collecting and distributing money, 50% to artists, 50% to owners. >> in my 25 seconds left i want to say, i appreciate your testimony. i can tell you bring passion to the subject and you persevered. i thank you for that. i know it hadn't been easy. i will yield back my seven seconds. [laughter] >> thank you, senator. senator blumenthal. >> the artists in this group can do a lot with seven seconds. i can't. but i have five minutes. i want to think all of you for being here. i'm a longtime supporter of this

measure, the ominous bill, i want to thank my colleagues on this committee and all of you for being here, as this committee considers legislation aimed to bring more certainty and fairness to the music licensing marketplace. i understand the head of the department of justice, antitrust division, is considering terminating the pmi consent decrees. thee form the foundation of public performance licensing marketplace. they are extremely abstruse and invisible to most of the fans who consume products. but they are central to the structure we have right now. i have serious concerns about the department of justice

undertaking that action, particularly if it does not first work with congress to ensure we have the framework in place to prevent market chaos. rose, i sawou, ms. you had begun shaking your head in an affirmative way. what benefits do these consent decrees of four to the use of economy? to the music economy? >> i was a personal the panel on this issue. -- a person on the panel of this issue. there are certain aspects of music as a product, forgive me if i get wonky. >> it is important to be technical here. you have the opportunity to give lawyers on this panel and education including myself. we are here to make laws. we are all fans of the music.

we need to make sure the lyrics in the law, make sense as well. >> there are certain aspects from an economic perspective of music as a product that tend to lend itself to collective bargaining. collective bargaining is not anything the law prohibits and it is beneficial in any circumstances. -- many circumstances. the current structure of the pro's combined with music represent-- pro's oftentimes individual songwriters. as a result, in order to fully license any song, all delivery services become equivalent to a captive market. this raises the risk of having anti-competitive behavior. because these are fundamental market characteristics, the

existence of the pro's and consent decrees and blanket licensing, reduces uncertainty. it allows for fair negotiations between parties and increases access for consumers. the department of justice included a review in 2016. it concluded no modifications to the consent degrees warranted has anything -- has anything changed since then? >> >> not to my knowledge. >> that conclusion would seem to still have validity and the message to the assistant attorney general in charge of antitrust, should be keep the consent degrees in place? >> correct. >> does anyone disagree? reporter: thank you, senator -- >> thank you, senator. >> is important to note the property right of a songwriter, josh, smoky, their rights are

not regulated by law. it is a free market right. it is just these two companies that happened to be trapped in a consent decree that never ends. there are others. they are not regulated by consent degrees. they operate in free-market. songwriters who belong to ascap and bmi are now at a competitive disadvantage because there are different rules that apply. if there is a desire to regulate, congress should do that but absent that, the jod decree -- the department concluded that consent decrees should sunset every year. they did not apply that retroactively. >> my time is expired. i would make the point, the review was conducted in 2015. the determination was made that the consent decrees were still

justified by the facts existing then. the facts have not changed since then and so, the message for me at least, to the department of justice is to keep degrees in place while congress is hopefully going to legislate. >> thank you mr. chairman. >> senator. >> thank you. thank you for being here today. our job isn't always this enjoyable. this has been a delightful hearing. a great opportunity for us to learn, not only about the creative side but about the incredible complexity of the music business. i think senator hatch made a comment about the complexity of the business, on the business side and it reminds me of prescription drug pricing, may be intentionally designed to be difficult to understand. i don't know. i do believe, the intellectual

property you create is just that. it is property. you ought to be protected in the property you create and that we all enjoy. i texas where i come from, live in austin, texas, which is the live music capital of the world. at least that is what we call it. 15,000 business and music industry professionals, including 8000 recording artists. it is big business. it creates jobs. 95,000 permanent jobs according to the texas music office, $3.6 billion in annual earnings and over $8.5 billion in annual economic activity. itis not only a job creator, is something that has made our lives more enjoyable and more pleasurable.

i would be interested mr. robinson, with your long career, to testify, if you can spend 30 seconds and talk about how much the industry has changed over your career? >> the industry has done a 360. it is not nearly what it was when i started. there were record companies, stores, you could buy records and browse, whatever you wanted. none of that exists anymore. i wanted to say something else. when mr. harrison was talking he was saying, an artist or writer, if they did not feel like they were being compensated correctly, they could always sue. beginning ofhe 2016, i decided i would audit everybody. which i did. everybody, that was a source of income for me. companies, irger

audited them. it turns out, one of them, according to the audit done by professional auditors, they owed me a quarter of $1 million. they told me they would give me all thousand dollars and if i wanted to fight, bring it on. -- $12,000 and if i wanted to fight, bring it on. how could i bring myself to fight a company like that for 20 years? an artist who does not have the financial wherewithal that i would have, fighting a company like that were trying to sue somebody is out of the question. we need your help. we need the senate. we need you to come to the rescue and to take care of that. most of the people under those circumstances cannot afford to sue or fight or anything, or even investigate. it has changed totally. there was a time when even if you are not being paid correctly

by a record company or sound exchange, you were getting money. now that is not happening. there is a really close friend of mine, who had one of the biggest songs probably in the history of the business, two $2700ago and he received for the performance. millions all of the world, ok? $2700. this is crazy. we need your help. we need you to say, enough, and solved it. >> that sure does not seem right. >> absolutely not. >> i congratulate you for bringing us as near a consensus product as you can, recognizing this is complicated and difficult. andave a lot of songwriters

people in the music business in texas paying attention today. one of them sent me a letter that i would like to make part of the record. this -- >> without objection. >> this comes from mark of mercyme. i would ask consent this be made part of the record. >> without objection. >> in the seconds i have left, is there such a thing as a willing buyer and a willing seller in the music business? >> it strikes me is so complex, i don't know how you could have that important relationship to develop a market base price? >> for interactive services there is a willing buyer and a willing seller. that benchmark is oftentimes with the royalty bar and the board will look to to set a rate. there are market deals they look to. it is not perfect by any means. it is difficult on the one in, you cannot argue for a compulsory license, not get

permission, asked the government to set a rate and then say because i got it there is no market and i should not have to pay that price. you cannot win both ways with those arguments. it is a compromise. we will have a compulsory license when the government sets the rate so it is not a free market. but at least they have benchmarks so they can get insight into how to set the rate in the best way possible so you get as close as you can to a willing buyer, willing seller. >> thank you. senator. >> thank you mr. chair. i would think all the panelists and the wonderful artists. -- thank all the panelists and the artists. the music modernization act would change a system of paying royalties that has not changed in years. currently the bill requires a licensing collective to create a database of copyright owners and engage in efforts to identify musical works embodied in particular sound recordings.

identify locate copyright owners of such works. the bill will not help musicians, if the artists are not aware, that the system has changed. several parts to my question. how we make sure the smaller artists or players know about the new licensing collective? what steps at a minimum do you think the collective should be taken to ensure artists are found and paid royalties they are due? >> thank you, senator. great question. it highlights the problem with the current system. today, when a digital company is unable or unwilling to find the proper owners of the songs, there are loopholes in law that allows them to use the song without paying and without being liable for treatment. -- for infringement. it is been a huge problem, as the streaming industries have grown the problem has grown. we have partnered on a solution.

the solution is not perfect but it is the best system i think that will exist in the world because first, you will have a search for the ownership paid for by the people using the music. what that means is for the first time, anywhere in the world, songwriters will get 100% royalties and not have commission taken off the top at the expense to find them. that is a major part of this bill supported by songwriters and a major thing technology companies are doing to help solve the problem. after you try to find the writers you are not going to be perfect. you will have mistakes. what this bill does the first time in the world is create a transparent, public database of what was found, and identifies what could not be matched so any songwriter, publisher, anyone can look into this database and claim what is theirs over a period of time. that gives us a second check on the problem.

in terms of educating small songwriters, publishers, it is a huge concern of ours. i'm very proud that every mainstream group has endorsed the bill and is working to help educate writers. leaders ofm we have the nashville songwriters of association and the songwriters of north america committed to making sure their membership is aware of how the system works and that royalties get paid to the proper owner. concerned,s you are the idea is to use best practices for finding the songwriters and making sure that canhave various ways you ensure you have everybody? >> we need to work in partnership with digital companies. today their matching between 70% and 90% revenue generated from playing songs. when they cannot find the owner, that creates a problem for both sides. it is liability for digital and it is a problem for the writer trying to make a living.

i coming together to partner, in the way that we have, is why you achieve such consensus. there is practically nothing else we all agree on in the music industry and the technology industry but we have come together on this bill. >> that is good. i want to be reassured that you used best practices. do you think the collective should consult with expertise in the music industry -- in hawaii, we have vibrant native hawaiian music industry -- to ensure names of the artist, and words are correct in the database? it is very easy to get hawaiian artists names wrong? , for example. to make sure people are aware of the system. familiar with hawaiian music for example -- should be part of this collective -- licensing collective? >> it would benefit from anyone's help who could provide

input. one of the great things about this collective -- today, if you have problems finding the owner of a song, if one service gets the answer, none of the other services know that answer. for example if apple figures out who owns the song, it doesn't mean that spotify or amazon knows. once you've solve the puzzle piece, it is solved for everybody. for the first time in the world, we are taking a music database and treating it not as confidential or proprietary but as a public -- document that anyone can look at and correct. >> that is reassuring. one more question? >> sure. >> my time is up. in 2015 the wall street journal noted that streaming services typically fail to pay royalties on 15% to 20% of songs. these are identified writers. what would you consider to be a

successful rate of identifying and paying songwriters for this new licensing collective? you say there will always be mistakes. 15% to 20% of songs, not being played without royalties paid -- is that acceptable? >> it is not. our goal is 100%. i know we will fall short. our goal is to get the best of matching that we can. there are some actors in the industry to do a good job in the 90 percentile. working collectively, by making data public, we have a chance to improve upon what any individual company is doing today. i'm confident we can reach a match rate higher than has ever been achieved. >> just to make sure that happens, d think we should increase the timeframe to claim royalties from three years to five years? >> i don't. the timeframe only starts after you have tried to match. once the data is received by the

new collective, they will do their best job to match it with all available tools. it is only when they fail to match, the clock starts running for that three-year period. that was chosen because it mirrors the statute of limitations on copyright infringement. >> senator. >> thank you senator hatch and your work on this and thank you to all of you. if i wasn't for this bill i would be in trouble in minnesota, given that i live in the home of prince and bob dylan. we miss prince dearly. he was a fierce advocate, as all you know for the rights of musicians and songwriters. once for halloween. i took second. blocks from 4th street. i was trying to, compete with senator kennedy for some lyrics to quote, but i did not want to

freak out senator hatch. [laughter] >> i resent that. [laughter] >> instead i went with something i thought you could use with colleagues if you need to, from a famous bob dylan song, the times they are changing. comments senators, congressmen, please heed the call, don't stand in the doorway, don't block up the hall. [laughter] you can say that to them if they are not supporting your bill. very good. i was going to ask you about competition, and what you think how these reforms would affect competition in the music industry? >> the best way to have true competition is to remove compulsory license, consent decrees, we know that is not happening anytime soon. competition that is allowed for within the bill, basically

doesn't change the nature of how you licensed mechanical royalty, changes the nature of how you find and compensate the owner. with regard to performance space, you have two actors regulated by the justice department, in a free market but at least it puts them regulated in a position that when they go to court, and when a single federal judge gets to tell a songwriter, like josh or smoky the value of their intellectual property, at least that judge can take into consideration evidence about what that entity is paying for the other copyright which is today, they are not a lot to consider. we think it improves on competition but there is still more work to do. >> you think it could make more works available if legislation is passed? >> for digital services -- >> we will break away from this hearing. as the house gavels in an backup. you can watch, streaming online at www.c-span.org.

in the house today, this is national police week. the house will take up several bills on law enforcement issues. to the floor, live on c-span. the speaker pro tempore: the house will be in order. the chair lays before the house a communication from the speaker. the clerk: the speaker's rooms, washington, d.c. may 15, 2018. i hereby appoint the honorable act as speaker pro tempore on this day. signed, paul d. ryan, speaker of the house of representatives. the speaker pro tempore: january 8, 2018, the chair will now recognize members from lists submitted by the majority and minority leaders for morning hour debate.