♪in ♪ >> c-span's washington journal, live every day, with news and policy issues that impact you. morning, former white house press secretary sean spicer will discuss president trump's relationship with the media, and former cnn political analyst will schneider will talk about his book "standoff." lisa collins of the senate forest -- of strategic international studies will discuss north korea's threat. be sure to watch c-span's "washington journal" 7:00 eastern sunday. join the discussion. senateuesday, the judiciary committee board from a recording artist smokey robinson and other musicians and industry executives about updating musical licensing, copyright, and royalty payment laws.

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>> witnesses, please be seated. thank you everybody. everybody, for being here. as we have an opportunity to settle a lot of issues that we have been finding. trying to find a solution for, for a long period of 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 artists will testify about how to protect and promote music creation for the 21st century. we are fortunate to have talented artists on the panel. and several more in our audience. we extend a warm welcome to all the particularly those that are here because of what you contribute to the society that 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 grant, on the foundation upon which america's creators and artists stand and thrive. it is important that singers,

songwriters, musicians, technical engineers, producers and all the men and women who support creativity and artistry behind american music, be rewarded for their efforts and incentivize to continue producing their invaluable work. music enriches our lives. it inspires our world. every one of us has had a special song that touched our heart were linked to a fond memory. the magic of music has always been and never will change. 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 music. today many stream their favorite music using services like amazon, spotify, pandora,

apple music. music lovers can access their favorite songs anywhere, at any time on a variety of devices. what is critical is that consumers are able to access their music legally and that our laws do not thwart peoples ability to legally enjoy their music and artists to be compensated for their creativity. while the music industry has continued to adapt to reflect technological developments, and changes in consumer preferences, the licensing framework however, which governs the music industry, has not. instead, the law has attempted to play 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

applies inconsistent rules that place certain technologies at a disadvantage and result in an inequitable compensation variances for music creators. music copyright licenses and laws have been criticized for being too difficult to comply with. and for not adequately rewarding the artist and professionals who create our music. there has been a lot of discussion on how to improve the music licensing and to the benefit of the stakeholders involved in the creation distribution of music. the house of representatives, the chairman of the judiciary committee held hearings.we collaborated with copyright experts and copyright authors

to find a path forward for music licensing. multiple bills were introduced in both the house and the senate. songwriters, artists, publishers, producers and distributors have coalesced around three bills introduced in both the house and the senate. these bills are as you know, number one, the music modernization act. which among other things would create a mechanical licensing collective for all digital music. that streaming entities can find and compensate artists for their work. number two, the classic track of it would add copyright protection for pre-1972 sound recordings. and number three, the impact. it would allow the payment of performers and producers, mixers and sound engineers of sound recordings. the chairman combined the bills into one package.

the music modernization act. and was able to successfully shepherd the comprehensive bill through the house of representatives 415 - 0. and now there is another bill currently has 17 cosponsors including this senator and that is where we are today. that is why we are here today. a lot of hard work went into crafting and negotiating these three bills. they were combined into comprehensive package which, after which there was more negotiation and compromise resulting in the text of s2823. try to reach consensus on what

we think would work best for the music industry. some remain. that is natural around this place. i'm hopeful that we can resolve outstanding concerns. i think that the 415 to 0 vote in the house is instructive and how much support there is for the people supporting the packages supported by music stakeholders on both sides. by digital service providers as well as music creators. they have coalesced around the comprehensive bill. i am encouraged by the momentum behind the unified package. and the possibility of congress finally passing meaningful reform in the area. ...

mr. robert and mr. kear we are so pleased to have you here as well. and let me also mention diane warwick and karla redding and in the audience supportive of 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. look forward to hearing from our panelists about how the music licensing system works for creators and users whether the legislation we have the force will help address problems or whether there are concerns that we can consider. i'm about ready to add let me say music licensing issues are

rife 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. [applause] >> thank you very much mr. chairman and thank you for holding this important hearing. we haven't had a chance ladies and gentlemen to hear copyright issues for several years because patent issues have been our main consideration. i've been on this committee at while but i have never seen anything more difficult than the patents issue. i look forward to what senator grassley said and that is that we may well have at hand some bills which offer good solutions to these copyright issues. i'm delighted to welcome another californian to this issue and way over here in the end.

if i look over i think that's where he started and that senator kamala harris. our state has a long tradition of supporting creative arts. southern california is home to the music industry were countless young musicians, songwriters vocalist and composer's have created music all over this world. and in northern northern california there is, wellspring of new technology with innovative new companies developing apps and web sites in music for the public in ways never before possible or even thought about. technology is making it possible for the strong independent singers and songwriters to bypass traditional channels entirely but the laws governing and how they get paid have the dollies kept pace.

music may be a source of enjoyment for us but for artists it's their livelihood so it's important to singers and songwriters are paid fairly for their work. 20 5 years ago i helped pass the digital performance rights in sound recordings act. that was 1990 5, believe it or not. some of us have previously called for the adoption of a willing seller standard across all platforms that ensures artists are paid fair market rates. i'm proud to sponsor it with chairman grassley which would for the first time provide federal 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'm pleased to support legislation to ensure artists are paid for their works that were recorded before 1972. one of the bills before us today would erase an arbitrary distinction under current law that provides the same copyright protections for digital streaming for all artists. i also strongly support establishing new licenses that will make it easier for digital music companies to broadcast more music to larger audiences. the at the same time it's important that the pass legislation that we don't create unintended consequences. with the music modernization act congress is delegating a government act to baby to a private entity and then establishing how that entity is controlled. this bill would give control

over new collectives to music publishers, publishers that directly license with digital music companies. the current comparable model that is already in place sound exchange a successful music licensing entity established by congress in 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/the the between music publishers and other songwriters, different songwriters than the ones that are used to royalties. i've heard some estimates that this could be unclaimed royalties could be hundreds of

millions of dollars of 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 a songwriter that wrote the music into has claimed these royalties. are these individuals properly protect the and are there sufficient incentives in place to find the people that the money belongs to and that's the great question that i have in mind -- in my mind. in conclusion i support the general policy 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 have got to perform or due diligence to ensure that legislation doesn't result in problems that will require an

act of congress to fix. so holding this hearing is both important and a first step. thank you chairman grassley. i'm pleased to be working with you to ensure that our singers and songwriters -- . >> we will and should use the witnesses but since senator hatch has played such a key role in this legislation i'm going to give him an opportunity. >> thank you mr. chairman. i'm pleased to be here today to discuss this legislation we have proposed. as a songwriter myself i have a particular interest in ensuring we have fair well-functioning music licensing laws. and ensure that singer songwriters are paid fairly for their work great for too long our licensing laws that disadvantaged contact -- content creators and so uncertainty may have worked in the days of the player piano or vinyl records but in the digital age where

cataloging of a music source runs into the millions of songs it's no longer practical. that's why we have touted or build a music modernization act. our bill will bring her music licensing laws into the 21st century to ensure the songwriters are compensated fairly for their work and the digital music services are able to operate without legal uncertainty. the bill has 21 bipartisan co-sponsors and i look forward to adding many more. i would be remiss if i didn't thank the many groups and supporters who have brought us to this point. our bill passed the house 415-0 late last month, a remarkable feat that owes much to chairman bob goodlatte and representative doug collins leadership. there are many supporters here in the senate as well. i thank chairman grassley for

joining me on her recently introduced package bill for all he has done to bring this issue to the forefront. here's an essential voice and he has been an essential voice in this conversation. i also think ranking member feinstein for her leadership on her strong interest in this issue. no one knows better than senator feinstein how absolutely critical music licensing is to her home state of california which houses both the recording industry in the tech industry that today brings music to so many of our homes. senator feinstein is a master legislator and i look forward to working with him to move this legislation which will do so much for her home start -- home state and bring us across the finish line that i like to thank senator whitehouse who has been with me on this journey from the beginning. we first set out to ensure songwriters were paid a fair market rate. senator coons likewise and

senator kennedy deserves on a number of important bills in the last few years. he really does know his stuff and senator kennedy is a rising star on our committee who is making important contributions and showing a serious interest in passing serious legislation. i'd also like to thank senators harris durbin leahy crapo and phillips for cosponsoring the recently introduced package bill as well as others who have cosponsored prior versions. of course i need to thank senator alexander who is not on our committee but a very talented man for his leadership that has been absolutely essential. senator alexander understands the music modernization act and has been an advocate for this legislation but i want to thank you again mr. chairman for allowing me to make this short statement. >> will call on senator feinstein to introduce

mr. robinson and senator harris wanted to say a few words afterwards. >> thinking very much mr. chairman. i'd like to briefly introduce him to have of kamala harris and myself some distinguished, well the whole committee some distinguished californians who are joining us here 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 this song just to see her. smoky robinson has amassed 37 top 40 hits over the course of his illustrious colin rear. he is a recipient of numerous accolades including the grammy's

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 impacts of all three of the bills were discussing today. how the music modernization act will impact songwriters, how the actual impact singers and how it will impact producers. so smoky 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 'n roll hall of fame of 1988. there she is. it's great to welcome you, mary. darlene love also has been

inducted into rock 'n roll hall of fame and is listed in "rolling stone"'s list of 100 greatest singers. where is she? there she is. [applause] and also with us and special for me is grammy award nominee dionne warwick who is second only to aretha franklin for the most hitss of any female vocalists of all time. a wave? [applause] and of course carla redding andrews daughter of the iconic soul and r&b singer otis redding and executive director of his foundation. [applause] i will yield to my colleagues senator harris. >> thank you mr. chairman senator feinstein you're a

terrific legislator and thank you for the work you do. i'm happy to be a part of this discussion on how we are going to protect music creation through the 21st century. i think we can all agree that even though some of our best and greatest music comes from previous decades that does not mean better music licensing laws should only be in those previous decades so i'm proud to join senators hatch alexander whitehouse coons durbin and kennedy leahy and chairman grassley to co-sponsor bipartisan legislation to modernize how we compensate and distribute their music. it will benefit out the artists who produce today's hits and the innovative technology companies to bring that music to their fans and it is my great honor to introduce someone today who knows more than just about anyone about the music industry.

he is a friend. he is an incredible californian. he is an icon and he is the incredible smokey robinson. smoky was born and raised in detroit where he founded the miracles as a high schooler. it was smokey has suggested that they start motown records and smoky 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 sounds of motown influenced everyone from the beatles to the civil rights movement. something that unites us as a country and across the globe. because of all the 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's living legend award, the national medal of arts, the

kennedy center honor and the library of congress is gershwin prize among many other awards. and throughout his career he has lifted his magnificent voice in support of civil rights and justice for all. mr. chairman if you will indulge me and her colleagues i will ask that her colleagues vote in favor of this bill and bring music creation into the 21st century and if you'll indulge me i'm going to ask that her colleagues second that emotion. thank you. [laughter] [applause] >> david israelite's presidency of the national public music association formerly chairman of the justice department's task force on intellectual properties serving as chief of staff for former senator kip bond earning it ea in political science at

william jewel college and j.d. university of missouri. meredith rose policy counsel at public knowledge where she specializes in intellectual property. she has worked on consumer issues at the fcc, the transatlantic consumer dialogue, avn english language literature and j.d. from the university of chicago. justin roberts whose parents i know very well for fifth two 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 covered square records and independent label based in chicago and

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 business affairs at pandora. mr. harrison has a j.d. and ph.d. in political science from the university of north carolina. david del beccaro founder of music choice previously vice president of business development and general instruments communication division, division of harris international. he is a graduate of stanford a and ms in industrial engineering mitch glazier previously served

as chief consul for intellectual property house judiciary committee and pratt as commercial litigation for the chicago law firm social policy northwestern university and j.d. vanderbilt law school. josh kear is the national base songwriter for big yellow dog music where he has built his reputation as one of the countries hit makers. he's the only songwriter to win country song of the year grammy three times. mr. kear serves as an advocate for songwriters rights so mr. robertson and we will go from my left to the right. go ahead mr. roberts. >> 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 those hundreds of millions of dollars i acclaimed fine today. but it's really an honor to be here and i'm very happy to come and represent this proposal. i'm going to focus my remarks on title ii of the music modernization act the so-called trafficks act. as a member of the recording academy it's simple musicians who record for every 15, 1972 deserve to be compensated in the same way that those are recorded after that day. i will add to that as i'm saying this the fact that i know a lot of musicians and producers and writers who have fallen on hard times and who could really use that money.

it's a livelihood thing. it's not just -- music is about lives. they could really use that money and i'd like everybody to keep that in mind. the act is designed to fix the law that created this payback in 1972 congress decided to protect sound recordings under federal law going forward. state law protected sound recordings before then. the day my miracles records are being sold in stores when congress passed a law so artists and their labels were paid for their recordings. me and my fellow artists are thrilled and we are still thrilled about that and it was a great deal for digital record companies to cover all

recordings. negotiation with every reporter. the government set price was a win-win. for some digital radio companies lawyers found a loophole. those corporate lawyers asked what if we don't pay for recordings under the new federal license because they are covered under state law? and then what if we argue the laws are too old and state laws are too old to covered digital radio? that would allow them to funnel off of some of the most -- paying artists nothing at all and those avid radio listeners, or listen to radio all the time especially in my car in and most of the music is being programmed now and at least 50% of it is pre-1972 music.

so that should be taken into consideration. the records of the 50s and 60s are called classic because of their greatness. it still resonates today. the financial value to the company's that play these recordings is clear. that's why there are dedicated channels on satellite radio. you get the idea because they are still playing that music which is attracting listeners to their stations. let me put this in due perspectives. the miracles were one of the first act signed to motown in 1957. their first sewing kit was shop around. second that emotion in 1967 in tears of a clown in 1970. those happen to be some of the tech is records i've been

associated with and to not he paid because it was prior to 1972 is ludicrous as far as i'm concerned. a lot of work went into making those songs not just for the artist but the musicians and the writers and the producers and people who were involved in making them and they should be compensated. the law says i get paid for digital radio service from 1979 to 1981 but me and my brothers in the miracles are paid in our recordings. those recordings are valuable. altogether the miracles and smokey robinson's recordings are strained by folks who used his federal license over 50,000 times a day, every day. the calendar should not be the arbiter of value.

i hope that we can all recognize the value of what we are trying to accomplish here today because it's very important and especially like you said for me to know these people personally who could use this. i recall going to bed on the night of february 14, 1972 and saying tomorrow i start making account. [laughter] i don't believe the people of this country have ever made that distinction either. in fact over three-fifths of rolling stones top songs of all times were released before 1972. these records matter to people and they matter to digital services. if they earn robertson attract listeners because they play these recordings it's only fair that they should be paid. now i reckon as i have been lucky and i really have.

not only have i been lucky at been very very blessed because i'm still able to perform and to earn a living doing my craft and making records and songs and so forth that there are a lot of people, and i mean a whole lot of them who are not as fortunate or blessed as i am to have a continuing career which allows them to still be earning money today and we need to take them into consideration. we just should, it's only right. especially at this point in their careers this is how they make ends meet so that's very important. of course if songwriter and producer, as a songwriter producer and thrilled that the modernization act also includes mechanical licensees reform for

songwriters and a mechanism for music producers to be paid. it creates certainty and efficiency fort digital services. pitstops litigation and starts cooperation. the legislation is brought together parties who don't always see eye-to-eye but see clearly the need for fair and modern system that works for everyone. that like to give special thanks to all the members of this committee who supported the comprehensive music legislation but especially senators coons kennedy and booker who were the first to champion it. my fellow songwriters senator hatch and senator whitehouse, chairman grassley and ranking member feinstein senators graham , just one second.

corden crapo flake durbin harris klobuchar and leahy. thank you for your support of these important issues. this is an unparalleled feeling of accomplishment that comes from creating music. there is an unparalleled congressman that comes from creating music. the hours and effort that went into writing recordings is 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 constructive and enduring. something that will make a profound difference in the lives of so many. the music modernization act will make that difference. thank you for making this a reality and they really appreciate everyone who is here and all the senators who are

supporting this particular act and this particular subject because it's very important. would he like if you went to the grocery store or the supermarket and the owner was there and he said okay i'm going to get groceries from you for the next 10 years but i'm not owing to pay you. it's the same thing. when people do things or create a business to make a living for themselves they should we compensated for that and the music business is no different than that. if we stop paying people for music that's ludicrous because of the fact that their time effort and creativity went into creating the music that people are getting pleasure from enlisting to and having forever and ever. i don't think there should be a time limit on that. people are going to be creating music forever.

those in the past should not be not compensated for their work because it expired in 1972 and i appreciate it. thank you. .. . >> which represents all music publishers and their songwriting partners in the united states. song writers are the most essential members of the music industry, yet they're often the least visible and the least compensated. they're also the most regulated small businesses in america. 75% of their property rights are

regulated through compulsory licenses and federal government rate spending. this is true because of a world war i era law designed to regulate player piano roles and world war ii degrees imposed by the justice department that never end. the role of value of songwriting as been diminished and songwriting doesn't benefit the xhishl interest who use their songs. i'm proud to be joined on this panel by my friend and one of america's best songwriters josh keer. i have the honor of honoring josh for his sit song before he cheats recorded by carrie underwood. before he cheats 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 just a little over $3,000 in mechanical

royalties from streaming. it is unacceptable for song writers like josh, which have such commercial success, to be prevented from seeing their fair share of that success. i believe that songwriters should be in a free market, but i also understand that removing the chains of a 1909 law and 1941 consent decrees would be opposed by those who pay songwriters and, thus, would have little chance of becoming law. so if forced to live under these repressive government regulations, it's best that it works. and by improving the licensing system, we can also improve how much songwriters are paid, then this is a major step forward. the music modernization act was conceived as a win-win for songwriters and digital services because it solved practical licensing challenges while also improving fairness and determining rates for

songwriters. the mma creates the first transparent copyright database that is paid for. digital music services often don't 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 streamline system allowing digital companies to use all music and to pay fully. but the process by which songwriters are paid is not as important as how their songs are valued. in addition to improving how songwriters receive their royalties, the mma improves the standard for calculating them. the mma also updates how hearings are conducted, allowing them to put on the most effective case possible for their songwriters and publish s publishers. put simply, if songwriters are to remain in a compulsory licensed prison, let's at least improve the conditions of their

confineme confinement. the mma passed the house unanimously 415 to nothing because it involved compromise by all sides and is a private sector solution to a government problem. the mma is the best hope to help songwriters living in extreme world but still regulated by a rule designed by player pan kia which is why the community is asking for the support. >> thank you. >> thank you, chairman grassly and feinstein and members of the committee to testify on the bills currently before you. i'm here to comment on the classic's act and the harm that it would cause the copyright eco system 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. mainly the treatment of pre 1972 sound recordings. i agree with mr. robinson that

legacy artists are, in fact, desperate need of relief. however, contrary to many statements i have already heard put into the record, the classic act does not actually grant copyright protection to pre1972 sound recordings. instead, it puts on an additional right on top of the already existing chaos surrounding 1972 and pre1972 recordings. what non-profit consumers, educators and archives as the players in this eco system is need is not a new federal right on top of the pile but a systematic and complete harmonization of these words. the united states copyright office itself opposed the framework advanced by classics in its 2011 study saying "pre-72 sound recordings should either be part of the federal statutory scheme or not part of that scheme and it would be a mistake to keep them out of the public domain until 2067", when only a fraction have significant value

and can make the others widely available for study and research. i have with me a 70 rpa record. there are a lot of remarkable things about this record. but i want to draw attention to a few in particular. first is the grooves on this are actually pressed from shelac. it is hard to preserve as many sound recording archivists can tell you. the overwhelming majority of work in this era has never made it in this format. this record, for example, contains a recording a fox trot called there's a girl in the blue ridge mountains by a composer who is only listed by the name moore. one name. it is entirely possible that this is one of the few remaining captures of this recording left in existence. classics would prevent archives from preserving this record and making it usefully available to

members of future generations. as you can also see on the chart all the way down to the left there, unfortunately we were a little crammed for space, classics would help with the discrepancy between works and sound recordings. all of them would remain 95 years after the original publication. however, in enacted classics would show that it would remain 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 enjoy shorter periods of protection. congress must not sxaesht -- exacerbate this gap. classic is by no means a bill. the structure that this proposes is opposed by a wide array of non-profit and non-industrial users of music including the copyright alliance, the

associated of recorded sound collections and more than 40 intellect law professors from harvard, berkeley, stanford and others as an unnecessary and unreasonable impediment to preservation and access. congress should replace this with a bill that actually harmonizes these works with their modern counter parts, complete with the artist protection or at a very minimum limit the term of protection to 95 years from the date of fixation. thank you and i look forward to your questions. >> thank you, miss rose. now mr. roberts. >> thank you, chairman grassly, feinstein and members of the committee. my name is justice roberts and i'm a grammy nominated children's musician. the recording academy is known for the grammy awards but here in washington it's known as the trade association that represent's musics creators. the songwriters, performers and professionals that make the music we all love. i thank you for inviting me to testify this morning alongside my fellow members smokey robinson and josh keer.

while the academy members have wildly successful creators like me, middle class americans and songwriters who are not household names. except in my case with certain 3 to 6-year-olds. these middle class artists use their training and talent to bring music to the world. introduced by chairman grassly and ranking member feinstein along with senators harris and corker, it's an important music legislation. as an artist, i can tell you most of us rely on the steady hand and technical talent of a producer. as a child growing up in des moines, iowa, i loved music so much i sat in front of the record player all day. my teacher trying to direct my love of music into something more productive might have been my first producer. learning piano and clarinet, my

love of music continued. i played in bands in high school and college and began to pursue a career in music. i started writing songs for children and recording simple demos of these songs. i never thought of making music until a producer convinced me to make a professional recording of those songs. he's been my producer ever since, as my 13 albums have grown. they've sold over 100,000 copies and garnered three grammy nominations. quincy jones once said a producer's role is to capture lightning in a bottle. i guess the best way to demonstrate what a producer can do is show you. a producer can take something like this. ♪ and there's no doubt, there's no duty ♪ that school is out, school is out ♪ . >> and turn it into this ♪ and there's no doubt, there's no duty ♪ ♪ that school is out ♪ that school is out ♪ and there's no doubt

♪ there's no doubt ♪ that school is out ♪ it's time for us . >> the recording academy's producer and engineer wing has worked tirelessly for producers. at the direction of the artist, sound exchange pays royalties directly to producers, even though they have no statutory write. now we need protections for producers in the law. the impact cod fies the policy direct leaply at the artist's direction. this bill is supported by every major organization representing music. it has no opposition. so one might expect producers to act congress to pass it on its own. but that would be the fundamental misunderstanding. the producer worked with singers, studio workers, everyone associated with the creation of a record. the producer takes care of all of us, so it's no wonder they

want to see the amp act pass so that songwriters and legacy artists receive their fair share. in closing, try an experiment. listen to the 1969 version of the song i second that emotion by the spreems and the temptatio temptation temptations. reflect on the quality produced by the sound system. and enjoy the emotional truth in the songwriting by none other than smokey robinson. each contributor combined efforts to make this classic track. now we ask you to pass this combined comprehensive bill to protect all the music makers who have given us so much. thank you. >> thank you, mr. roberts. now mr. harrison. >> thank you, chairman grassly. ranking member feinstein for inviting me here to testify. my name is chris harrison.

d dema and it's members advocate for policies that promote innovations in digital content distribution. we thank hatch, white house, alexander, coons, chairman grassly for introducing mma. an identical bill recently passed out of the house on a 415 to zero vote. a truly remarkable showing of bipartisan support for long over due music copyright reform. while it shows several changes, my comment focuses on sections 115. simply put, the current section 115 license does not work for songwriters, music publishers or digital music providers in the digital streaming age. the mma by creating a license and licensing collective improves licensing efficiency and transparency and encourages digital music providers to invest more in creating

compelling music experiences for consume consumers. with the support of members of this committee, as well as members of the house judiciary committee, music publishers and songwriters came together in a spirit of compromise and cooperation to advocate for reform of section 115 that will benefit consumers, creators and copyright owners alike. they look forward to working with members of this community and members of the submit to move it forward. the music industry has been transformed by digital technology. while the earlier days were marched by music piracy and music revenue, legitimate music providers invested in these new technologies to bring a wide variety of innovative services that provide consumers with greater access, more choices and better value. today's consumers have lawful access to a virtually unlimited

catalog of music accessible across a multitude of devices. digital music providers give artists greater creative freedom, provide valuable information about how consumers engage with their music, facilitate direct communication with their fans, and even sell tickets to upcoming concerts. after nearly two decades of declining revenues, music streaming has saved the music industry. as detailed in the report, in 2017, digital music providers paid labels, artists, publishers and songwriters approximately $7 billion in royalties, accounting for nearly 80% of the total u.s. recorded revenue. and since it entered the u.s. market, music piracy is down nearly 60%. these successes occurred in spite of, not buzz of the section 115 license, which does not meet the needs of the digital streaming era. antiquated procedures for utilizing the section 115

license digital music providers from providing music. the archaic process of ish ssui section 115 has slowed the timing of payment royalties. to solve these problems, the mma establishes a new license to feechtly a-- feechtly. the mma ensures that these mechanical royalties will flow more quickly and more transparently than music publishers and songwriters. the mma also establishes a database to facilitate this in sufficiency. thank you again for inviting me to testify today. we look forward to working with you to see that the mcma is signed into law. >> thank you, mr. harrison.

n members of the committee, thank you for inviting me to testify as ceo of music choice. the first of this digital music service which i started in 1987. i want to em plain why section 10 which was added to the original mma build will put us out of existence. i hope you will delete it since it will save our company and not in conflict with the original mma legislation. if you have comcast or regular service, you may recognize that 50 channel such as rock, country and r&b hits, we are a small country but 70 million americans listen over 20 hours a week. a half million in iowa. a half million in utah. 4 million in texas to name a few states. they disproportionately come from middle income. we applied to part for the music licensing system is broken and should be fixed.

however, 103 eliminates the 803 from the copyright act. 801 b has been working successfully for many companies over four decades, including the operating companies that operated under these standards during the litigation. now that the record companies are no longer selling cds or down loads, they no longer want 801-b. 103 will subject companies to the newer, willing buyer, willing selling established 20 years ago. the problem is the judge's interpretation of this standard has been a disaster because this is not a free market. all licensees must contract with all companies and none of their music can be substituted for the others. no consumer will listening to any of the channels. the result is rates that are so unreasonable that in over 20 years of licensing under the willing buy and willing standard

not one of thousands of markets on the buyer's side ever made money for even a single year. i'm here today to ask that the committee remove 103 which will simply legislate our company out of business. unlike willing buyer, willing seller, it permits judges to set fair and balanced rates. this flexibility can result in massive rate increases. two recent rate decisions using section 801-b increased the rate by 40% and increased streaming services mechanical rates by at least 44%. in fact, numerous companies have gone out of business and counting all companies, there have been more unprofitable years than profitable years. 801-b is not a discounted rate. companies never saw a rate they thought was high enough and all streaming companies are unprofitable.

103 will not result in uniform rate setting standard since radio is exempt and the streaming services that were invited negotiate direct licenses and will not be subject to this process. 103 means that music choice and other companies will be subject to a theoretical premarket rate in name only that has never led to a sustainable instruct. 103 will result in the artist being worse off because radio and record company shows it will shift to radio which pays the companies nothing. eliminating 801-b is the primary concern but we recommend other improvements. in particular, shifting administrative cost on to the licensee is unprecedented in any markets. this will make it difficult for smaller music companies to enter the market stifling competition and leaving only a few larger companies. congress should structure the 114 collected the same way as the 114 license that's been working without a problem for 20 years. at the very least, delete the

provision when setting the mechanical rate. thank you. >> thank you. mr. glazier. >> good morning, members of the committee. my name is mr. glazier. i've been asked to focus on two parts on the classic act and the willing buy er, willing seller. it arises from old laws and new technology arising in discriminatory treatment of old artists recordings made before february 15th, 1972. while most digital music services do pay under a statutory license created by this committee for all the music they play, including for pre-72 recordings, some companies have targeted classic recordings. they argue that they don't have to pay to digitally perform classics because those recordings are subject to state protection and the license is a federal creature.

they also argue, however, that state laws do not apply to digital performances of pre-72 worth. so it's a circular argument that creates a windfall for some digital services at the expense of legacy artists and their labels. to illustrate the need for this new ford-looking solution, look how current practice has led to non-sensical results. frank sinatra's recording of my way made in 1969. but they do pay when they play the versions of those songs recorded by elvis presley in 1973. seth mcfarland in 2016. it doesn't make any sense. artists sued to protect themselves in several states so they could receive just compensation. the results have been inconsistent. causing uncertainty for both creators and digital services who may have to face dozens of lawsuits for several causes of action in numerous states with

no exceptions and limitations, potential pun tiv damages and unclear rules on secondary liability. out of this uncertainty, the classic part of the music modernization act was born. it's a practical, real world, narrowly tailored solution with overwhelming support that does not extend or change the term of copyrights that currently exist for these works. and that sets one set of rules for all. the music modernization act includes provisions to apply as well the willing buyer, willing seller rate standard that was created 20 years ago and apply it to both songwriters and artists in the music licensing sections of the copyright act. the rates for music should seek to reflect a true competitive market to the greatest extent possible. the music modernization act finally moves the industry forward. it favors no one platform or company over another. it doesn't discriminate based on the year that the company came

into existence. it encourages robust competition. it looks to the market as a benchmark for what creators should be paid. and it allows the music and technology industry to finally move forward together. this bill is supported by americans reform and the naacp. it's supported by the american conservative union and the afl-cio. when does that happen? it contains common sense solutions and the time has come. there are some that want to use the momentum behind the bill as leverage. to attach provisions to reduce artist protection and where there's always going to be a few outliers, 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 that have altered our world. and with your help, the music modernization act will ensure

their payment and that it's appropriately recognized. thank you very much. >> thank you, mr. keer. >> good morning. chairman grassly, ranking member feinstein and members of the committee. my name is josh keer. i'm a songwriter. thank you for inviting me to testify as a voice for professional songwriters supporting the music modernization act. i realized most of you have no idea who i am, but i'm part of a special community who work in the shadow of the spotlight to create the music we all love. i wrote my first song about a crush i had on a girl in my high school english class, and i knew then i found my calling. over the course of my 22 year career, i've written thousands of songs, most of which will go unhear. i was an overnight success culminating in my first under night hit carrie underwood before he cheats which also brought me first of four grammy

awards. i've been incredibly fortunate to write for tim mcgraw and dirks bentley. why it's my passion, it's also my job. i go into an office every day and i write song after song because writing one or two hit songs does not forever pay your rent or feed your family. songwriters make no revenue after t-shirt sales or endorsement deals. it used to be a songwriter could make a good income, but that income is a relic of the past. people don't buy music anymore. they stream it. and that means our public performance royalties, which include streaming, are our livelihood. while streaming has increased the reach of our music, our work is now valued less. we're talking fractions of pennies on the dollar due to out dated government regulations. and this is why songwriters are asking for your help in

washington. my songwritering colleagues and myself have been to many of your offices over the years sharing our struggles and ideas for bringing our out dated laws into the digital age. finally we have some real momentum with the mma. i want to thank chairman grassly, senators hatch, alexander and whitehouse and all of you who have co-sponsored about important bill. the mma includes key provisions that will help music creators at getting a fair deal for the use of our work. it will make the rate precedings my randomly assigning a federal judge to hear each rate setting indication. it will also repeal section 114-i of the copyright act. this will enable the judge to consider royalties paid fo recording artists when continuing what streaming services will pay songwriters. currently recording artists can make up to eight times more than songwriters for the exact same performance. these two provisions combined with elimination of the bulk

loophole and adoption of willing buyer, willing seller will improve fairness. and while songwriters wait for the situation to be resolved, we write. we write unspeakable truth. we write whimsical fiction. we write three minute screen plays and four minute novels. we write the fears and dreams of childhood. the adolescent howl of our teenage rules. we write the resolve of adulthood, the march of time and the wisdom of age. and with your judicious assistance, we will continue to write the soundtrack of all of our lives. the mma represents a historic coming together of a large array of stakeholders. it is a truly comprehensive bill. reaching agreements ben -- between publishers, streaming companies and broadcasters is a big task. but we have achieved precisely such a compromise.

on behalf of american songwriters, i ask this committee to swiftly adopt this historic legislation. the time is now and song writers both present and future depend on it. thank you. >> thanks to all of you for your outstanding testimony. i have two things that i want to do before i start questioning. one would be we have a series of letters here about the legislation. so without objection, i would put them in the records. hearing no objection. secondly, senator hatch, when i get done asking my questions will chair the hearing. i do that, number one, so he's helping me get to another event. number two, he ought to be doing it because of the respect that he has of all the work he put into this bill. mr. harrison, i have questions about mechanical licensing collecting. two questions i want to ask you,

so i'll ask them both at the same time and then you answer them both at the same time. can you tell us what are the digital media associations estimate of the expecting cost of the new collective? are members concerned that they'll be responsible for excessive and unreasonable costs, or does the bill prevent that from happening? and then the second question, do you believe that the oversite and accountability requirements in the bill are adequate, or do you think they can be improved? >> so, senator, it's difficult to know what the cost of operating collective will be. we saw estimates come out of the cbo on the -- when reviewing the house legislation that said the number was somewhere in the -- between 20 and $30 million a year. certainly my members don't want to pay unnecessary costs. the way the bill is structured does provide opportunities for services to have visibility into

how those costs are determined. we have a non-voting seat on the board. there's also provisions that allow the royalty judges to review projected costs when determining what administrative assessments are for digital providers. so we don't view mma as writing a blank check. with respect to oversite and accountability, i would note there are a number of provisions in the bill that do provide oversight. i mentioned the royalty judges oversight over the collective cost as one. certainly songwriters have the ability to audit the collective. the collective has the ability to audit digital music providers. and i also think it's important to note that the copper -- the register of copyright has broad regulatory in this under subsection d-12. so to the extent the register

believes that part of the ecosystem isn't working efficiently or transparently, the register has the ability to address those. having said all of that, our goal is to have the music modernization act and section 115 this year. so we will continue to operate in the spirit of compromise that we've exhibited throughout this process and address any concerns that members have with this legislation. >> okay. and for mr. israelite, i have questions. how do you expect new members to be chosen. who actually does that? how should interested parties expect concern with anyone identified as a potential board member? and what happens in the event of a tie vote on one of the

collective sub committees should the legislation address that possibility? and if so, how? >> thank you, senator. the way that the initial board will be chosen is very similar to how sound exchange came about and a very similar process. the music publisher will choose the publishers that will sit on the board and a collection of songwriter groups are choosing the four self published songwriters that will accept songwriters on the board. once that first board is appointed, that board will then come up with operating rules about how to deal with succession. similar to how it has worked very well with sound exchange. for people that have concerns about the board itself, all legal rights remain available to anyone that was specifically put in the bill on purpose so we can make sure there was an addition to the oversite that the copyright office has. federal court as a member -- re. and with the question about the

tie, the sub committees have half songwriter, half publisher and they're listed as an even number. and if that committee were to result in a tie, my expectation is that the whole board will go along with the vote. >> doesn't the board -- isn't the board evenly divided by artist and record labels 9-9? so how does that solve the problem? >> no, senator. the board is a 14-member board. it includes four self published songwriters and 10 music publishers. it is an even number on the board. >> is that the board of sound exchange? >> no, senator. if you're asking about sound exchange, that is not an even divide by artist and labels. there are also representatives of the union as well on that board and managers of creators. >> so there's no board where there's an even divide? the problem is solved by the

board, is that right? >> the board that's pro poeds in the mma is an even number of 14 board members. i can't speak to the sound exchange procedure for what they do in the case of a tie. >> okay. i'll look into that. let me ask mitch glazier, my staff -- i've been trying to follow this in bill language, which is difficult. but on page 126 of the bill, what i was just told is that your problem is solved or part of it is by the language the copyright and royalty judges shall establish rates and terms that most clearly represent the rates and terms that would have been negotiated in the marketplace between the willing buyer and a willing seller. is that adequate language to handle what you were mentioning to us? >> it is. and it's language that has been around for 20 years. it's been applied by the copyright royalty board many,

many times. and 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 it will apply to all services in both licenses. so 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 somebody came in after you, they get the benefit. >> so the organization you represent is a happy camper? >> we are -- we are thrilled. it is about time. >> good. thank you. one problem solved. what -- would you go into the new copyright protections that the act gives to authors of works prior to 1972 so we all in simple english so we all understand them. >> yes. it basically aligns with the

current structure that exists today. today states protect 372 work. it is clear that states will protect the reproduction and distribution of those works since congress said they could do so. that is the law today. classic does nothing to do that. if that goes into law, it would still be february 16, 2067. but there is question about whether or not digital performances are currently covered in a consistent way. and so what this bill does is it fills in the cracks and it aligns it right next to the rights and structure that exist so there's no fear of a constitutional taking and you're not cutting the reproduction and distribution rights that currently exist. but you are allowing artists to also benefit from digital performances in the same way that post-72 artists are able to

benefit. >> so the copyright protections in this are adequate. how would the pre-72 determinations be made? how would you find people that you obviously haven't found? >> right. >> what criteria are used? >> so the compulsory license that currently exists for all digital radio services will apply to pre-72 works under this. and sound exchange which is the agent that collects the money will divide the money 50/50 between artists and record companies. and their job is to find all of the -- >> well, what would they legally -- because 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 lawsuits? >> the bill preempts state law

when it comes to digital performances. and it aligns it all under federal law subject to that compulsory license. so they no longer have to worry about litigation in the states. that's the exchange in the bill. business certainty, lack of liability efficiency on one side in exchange of fair rights. >> well, what kind of obligations quickly do they have? what kind of a hunt do they have to make for people who would qualify? how do they know they're alive? >> right. >> or producing or where they are. >> right. the services don't have to do any hunt at all. they just report what they play and then they pay the rate to sound exchange. sound exchange has a whole team that is responsible for finding every single artist that is owed royalties, whether they're post-72 or pre-72. >> thank you. thank you. >> well, thank you, senator. mr. keer, let me just ask you a question. i would like to start with you. i mentioned in my opening

statement how our current music licensing laws are disadvantaging songwriters. in what way with the current regime impacted you and your work and do you believe our current licensing laws treats songwriters fairly? why or why not? >> i would love to address that. but 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 here on the hill, and we thank you for paying attention to our issues over the years. now to address your concerns. and to answer your question, as a display of how songwriters are hurting, since the year 2000, the number of professional nashville songwriters has declined by 80%. we have lost our entire middle

class of songwriters. they're gone. that statistic is due directly to the shift from the way we used to listen and acquire our music to the way we listen and enjoy our music now in the digital era. the world has completely changed under our feet. we are still operating on old and out dated laws. our music is being used more than ever and valued less. the mma will specifically help these outdated regulations and ensure fair outcomes for songwriters. i hope that answers the question you're asking. >> it does. let me just follow up to this last question. how can our licensing laws stay improved? and what sorts of changes can we make to ensure that songwriters get paid at a fair rate? >> the answers that you're

looking for are in the mma. they're here in front of you now. >> so you're satisfied with this? >> i am more than satisfied. the mma is going to update those outdated regulations. and a couple of sxams of the way it's -- examples of the way it's going to help songwriters. we're going to get rate cut reform with rotating judges that will hear our cases. and for the first time, they will actually be able to listen to all relevant evidence in those cases, including what artists are paid for the same usage. we're going to receive mechanical licensing reform. we're going to update laws that were in 1909 to regulate piano -- player pianos that are still regulating a huge amount of songwriter revenue today. and just as importantly as what it's doing, it is the way it's

doing it. i've been in many of your offices, and i know that my fellow songwriters have been in many of your offices over the years. and we keep hearing the same thing over and over. it's always been we want to help you. we know this is out dated 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's what this is. for the first time since we've been coming to you, we have a situation where real help can come from the creative community without having to fight further battles with the tech community. please, i beg you, pass the mcht ma and bring us the -- mma and bring us the relief we've been asking for. >> thank you very much. i'd like to ask you this question. music licensing is an incredibly complex subject with all sorts

of jargon and technical mumbo jumbo. can you tell what the key problems are and how the mma licensing act fixes the problem. >> i'll do my best in a short time. songwriters make their money in three ways. they have mechanical reproduction. they have mechanical performances which used to be radio. and they have sin kronization which puts it with music. it's not regulated by law, by consent decree. it's a free market. and songwriters do well. the first two parts are what's broken. on the mechanical part, we are licensing in a system that was built for licensing individual albums, 10 at a time, 12 at a time, and using it to try to empower companies to put up 40 million songs over night. it doesn't work. it's led to lawsuits. it's led to lost revenue and this will fix that problem and do so in a trade that allows

songwriters to get more money in exchange for helping the digital music to fix. on the performance side because of the consent decrees that never end, since 1979, the justice department has had every new consent decree since that within 10 years. but for some reason it doesn't apply to the 1941 consent decrees. while it doesn't fix them completely, it does help because it gives the two parties that have been living under these decrees since 1941 the ability to put on a real case in court and to have a fair trial in front of a new judge. so for those ways, songwriters are significantly helped by the bill. >> thank you so much. that's very clear. senator, let's go to you. >> thank you, senator hatch. and senator hatch, i just want to say thank you so much for being such a great leader in intellect property legislating. you are a classic and it's honored to join with you in this legislation today as someone who

himself is a songwriter. i think we needed your leader ship to pull this resolution together and move this forward today. to senator feinstein to senator whitehouse and senator kennedy, it's been an honor in trying to move forward this complex piece of legislation. as this entire panel has just detailed. this is a very complex area. for most of us, music is an absolutely magical part of our lives. smokey, as i was studying for the bar, there was a little old tape in my little old honda that i listened to every day on my way to study for the bar that had some of your most beautiful classic songs on it that inspired me and kept me going and lifted me up. i know dionne warwick would have been with us today. we've also had some of those from the spreems. those were the sounds of my life. and they inspired me and lifted me up. [ inaudible conversations ]. [ laughing ]

>> the day we get to say i love you back and forth smokey r robinson is a very good day. >> or the day we ever say that at all. >> i'll also say when digital services came out, like spotify and pandora and the opportunity to download and stream music, that seemed magical as well. and when i first became a senator eight years ago, i started taking meetings with song writes, with singers, with sound engineers, with folks in the digital and innovation communities and real lieds that these things were just really, really badly misaligned. that there was a thicket of issues around these badly out dated consent decrees and the laws in this area were incredibly complex and as you just pointedly shared with us that the folks who were losing was the creative community. that the songwriters and the singers were really not getting compensated fairly and there wasn't any path towards resolution. i think we should just take a

moment, senator hatch, and other members of this panel, and recognize that we have right 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 or issue. but it moves this forward. i'll focus for a moment, if i could, on the classic act. i first introduced it with senator kennedy. it was our first bill as a stand-alone bill because i was concerned about fixing a loophole that has kept artists on pre-72 sound recordings from receiving royalty when their muve music is enjoyed. i think, smokey said, 50,000 times a day. your recordings are being enjoyed on digital platform but without being compensated for it. i second that emotion is a song so powerful it's playing in my head even as we're talking right now. could you start for us, mr. robinson, by just saying what would the passage of the classic act mean for pre-72 artists. and what would you say to those who say this bill is just a

boone doggle to record artists and doesn't mean a lot. >> it would mean a great deal because you're talking about people who were writing and producing and doing musical things before 1972, which means now they're up in age. and your chances to make another living for yourself or get another kind of job when music has been your life for your entire life, it's frightening to me. do you know what i mean. because what if i want to retire? what if i don't want to perform anymore? i don't want to perform now. my income that i depended upon other than that as far as writing and producing and whatever has dwindled down to nothing. >> very limited. >> so people who were recording and doing those things before 1972 are at an age right now where that's more important to them than ever. because -- >> thank you. >> you're at the age where you're trying to wind down.

so that's very important. >> thank you. fairly compensating those who made some of these most iconic recordings was a big motivation for me. if i might, mr. chairman, i might ask mr. glazier just two questions. some of the criticisms and concerns we've heard raise today about the classic act suggest the bill will shrink the works available in the public domain and give pre-72 recordings the protection for far too long compared to post-72 recordings. are those accurate in your opinion? how would you respond to them and how would you suggest that that be the enemy of the good in this particular legislative resolution? >> they're absolutely not accurate. congress decided what the term of pre-72 sound recordings would be in 1976 and then again in 1998. there were many groups who didn't like the term that congress decided. and they challenged it and they took it to court in the altered case and the court upheld what congress decided.

and classics doesn't change what congress decided. the term was set a long, long time ago. the problem is not the term. the problem is that the law surrounding copyright is behind the technology. and so during the term that congress set, artists are not able to actually get the rewards that they were promised for that term. and there are some who never liked that term who want to use the fact that artists need to be paid as leverage to have a re-do and to 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 is that it does something that hasn't been done before. it applies all of the exceptions and limitations that don't necessarily apply in that term in the states right now and it applies it to digital performances. archive, library exceptions, lack of liability.

all of those fair use, all of those things that are uncertain. so it's a win-win-win. >> thank you, mr. glazier. there's compromise on all sides. this is a bill that can really move us forward. i hope we will pass this before turning to other issues that face the music industry. and i really hope we can make progress together on this. thank you so much for your leader ship on this, senator hatch. >> thank you, so much. senator kennedy. >> thank you, mr. chairman. let me first associate myself with the remarks of my colleague, senator coons. he was very eloquent. and as you can tell, he's very passionate about this issue. he and many others, including senator hatch who have worked hard on this subject. chris's comments kind of brought a tear to my eye. but it's not the tears of a

clown. [ laughing ] >> that would be senator tillis who you haven't met yet. [ laughing ] >> who doesn't know his way to santa fe. i can assure you. [ laughing ] >> you know, a smart person once said that art makes us more humane. it helps us find ourselves and lose ourselves at the same time. and you can't be a civilized society if you don't appreciate and protect art and artists. the system that we have now, both the public and the private system, looks like something i tried to draw with my left hand. i mean, it just makes no sense. now, this, as you know, this bill is the amalgamation of

three bills. the classic act, the amp act and the music modernization act. it's not perfect, as some of you pointed out. but it helps all artists. it helps singers, songwriters, engineers, producers. i think it helps the digital music industry. because our world has changed and the world of music that we know so much has changed as well. let me ask you a question, what digital music companies right now are paying pre-1972 artists, if you will? >> there are actually thousands of digital music services that unlike some of the few -- >> what are some of the main ones? >> that are paying pre-72 artists? right now iheart and pandora who

were subject to litigation originally came to the table to negotiate this bill as a solution to move the parties together so that they can have business certainty. and so they have pledged to move forward to pay pre-72 artists. those are the main ones. but there are also thousands of smaller companies who use the federal license and who have said we know that there was no intent here to find a gap. there are a couple big ones who had a couple very clever lawyers who brought us to this place today. >> now, who are they? >> sirius xm is the major one. >> they did not pay pre-1972? >> they did not. >> they chose to litigate instead? >> they chose to litigate instead. >> who else? >> there are pandora at the time was the other major service who

decided not to pay. mainly because their competitor sirius xm didn't pay and they didn't want to be put on a competitive advantage. so between them, they give a huge overwhelming percentage of royalties that go to pre-72 artists under the compulsory license, which is why artists had to go to courts in the states to try to protect themselves. >> okay. all right. what are the royalties that are paid right now to post-1972 artists? how is that computed? >> the copyright royalty board set those rates for different types of services. and so internet services that pay under a willing buyer, willing seller standard have to pay a percentage of their revenue. and they report the songs that they play. and then they write a check to sound exchange who is in charge of collecting and then

distributing that money 50% to artist, 50% to owners. >> okay. in my 25 seconds left, i just want to say, mr. kear, i appreciate your testimony. i can tell you bring a lot of passion to this subject and you perseve persevered. and i thank you for that. i know it hasn't been easy. i'm going to yield back my seven seconds, mr. chairman. >> well, thank you. [ laughing ]. >> thank you, senator. senator blumenthal. >> the artist in this group can do a lot with seven seconds, right? i can't. but i've got five minutes. and i want to thank all of you for being here. i'm a long time supporter of this measure and this bill, and i want to thank senator hatch and my colleagues on this committee and all of you for being here. as this committee considers legislation that aims to bring more certainty and fairness to

the music licensing marketplace, i understand that the head of the department of justice antitrust division is considering terminating the bmi consent decrees. as you know, these consent decrees form the foundation of the public performance licensing marketplace. they are extremely visible to most of the fans who consume these products. but they are central to the structure that we have right now. and i have serious concerns about the department of justice undertaking that kind of action. particularly if it does not first work with congress to ensure we have the framework in place to prevent market chaos. so let me ask you, miss rose, i

saw that you had begun shaking your head in an affirmative way. what benefits do these consent decrees afford to the music economy and listeners? >> so i was actually a participant on the panel. there were certain aspects of music as a product which fundamentally, you'll forgive me if i get a little wongy. >> it's important to be a little technical here because you have the opportunity to give the lawyers on this panel a little education, including myself. and we're here to make laws. so we're all fans of the music, but we need to make sure the lyrics in the law make sense as

so this raises the risk of having anti-competitive behavior and because these are fundamental market characteristics that pro's in the dissent decree that made like that licensing reduces uncertainty, it allows for more fair negotiations between various parties and it increases access for consumers. >> as you know they concluded

her review in 2016. it concluded that no modifications to the consent decrees were warranted. has anything significant change since then? >> not to my knowledge. >> so that the region would seem to still have validity and the message to the assistant attorney general in terms of antitrust should be to keep the dissent decrease in place. is anyone on the panel disagree? >> thank you senator. it's very important to note that the property right of the songwriter of josh, smoky there public performance right is not regulated by law. the free-market right. it is just these two companies that happen to be trapped in consent decrees that never end. their others. they are not regulated at

consent decree's. they operate in a free market so songwriters who belong are now in the competitive disadvantage against writers and the other peer goes because the rules apply so if there is a desire to regulate this and congress should do that but after that the justice department has no justification of war coke or patch will consent decree that never ends that it was quite clear in 1979 that consent decrees should sunset every 10 years and for some inexplicable reason they didn't apply that retroactively. >> my time has expired but i would just make the point that the review was conducted in 2015 and the determination was made that the consent decrees the facts have not changed since then and so the message for me at least to the department of justice is to keep these consent decrees in place while congress

is hopefully going to legislate. thank you mr. chairman. >> thank you. senator corden. >> thank you mr. chairman and thanks to each of you for being here today. our job isn't always this enjoyable but this has been a delightful hearing and a great opportunity for us to learn not only about the creative side and the incredible complexity of the music business and i think senator hatch made some comment about the complexity of the business on the business side and are minds me a prescription drug pricing which may be intentionally designed to be difficult to understand, i don't know but i do believe intellectual property that you create is just that. it's property and you ought to be protected in the property that you create him bet you all enjoy. in texas where i come from, i

live in austin texas which is the live music capital of the world. there are about 15,000 business and music industry professionals including about 8000 recording artist. this creates a lot of jobs, 90 5 thousand permanent jobs according to the texas music office in $3.6 million annual earnings and over eight-point 5 lean dollars in economic activity. it's not only a job creator it's something that has made our lives more enjoyable and more pleasurable. i would be interested mr. robinson since we don't always have someone like you with your long career testify at these hearings if he could just spend about 30 seconds or a minute and just talk about how much the industry has changed over your career.

>> we have essentially done a 360. it's not nearly what it was when i started. there were record companies and there were record stores where you could go on by records and browse and whatever you wanted to do and they don't exist anymore. i wanted to say something else. an artist or writer if they didn't feel like they were being compensated correctly they could always sue. starting at the beginning of 2016 i decided that i was going to honor everybody which i'd did. i honored everybody who was a source of income for me. two of the larger companies and one of them it turns out according to the audit that was done they or -- owed me a quarter of a million dollars. if i wanted to fight them then bring it on.

even in my position economically and whatever how could i put myself to fight a company like that for 20 years and an artist who doesn't have the financial wherewithal, fighting a company like that are trying to sue somebody is out of the question. so we need your help. we need you guys to come to the rescue and to take care of that. most of the people who were under those circumstances cannot afford to sue or anything or even investigate. it has changed totally. there was a time when even if you were being paid correctly by a record company or a sound exchange or whoever it's going to be you would get your money but now it's not happening and you mentioned a close friend of mine who had one of the biggest

songs probably in the history of the music business two years ago and he received $2700 for the performance. i mean it was millions all over the world. he received $2700. so this is crazy and we need your help. we need you guys to come and say okay, enough. >> buescher doesn't seem right. >> absolutely not. >> i congratulate you for bringing this product recognizing this is a complicated and difficult but as i mentioned we have a lot of songwriters and people in the music business in texas who are paying attention here today. one of them sent me a letter that i would like to make part of the record. this comes from barton malara to who writes in support of the

classics acts mr. chairman so it asks for your consent that it be made part of the record. >> without objection. >> so mr. glazier in the seconds that i have left is their willing buyer or a willing seller in the music business? it so complex i don't know how you can have that important relationship to develop a market raised price. >> there is for interact with services. there is a willing buyer and a willing seller in that benchmark is oftentimes with the relative board will look to in trying to set a rate. there are lots of market deals that they do look to. it's not perfect by any means. it's very difficult and the one hand you can't argue for a compulsory license and asked the government to set the rate of men say because i got it there should he a market price. can't really win both ways for making those arguments so it there's a compromise. we will have a compromise but at least they have to look at the

benchmarks in the marketplace so you can at least get as close as you can do a willing buyer a willing seller. >> thank you senator. senator hirono. >> mr. chair and i think all the panelists and all the wonderful artist and the audience. this is a question for mr. mr. israelite. the music modernization act would change the royalties and that hasn't changed as we have all heard in years. the bill requires the licensing collective to create a database for copyright owners and engaging in efforts to identify the musical works embodied in particular sound recordings and quote identified and locate copyright owners of such rights. the bill will not help musicians that the artists are not aware that the system has changed. that is several parts and my

question but how we make sure the smaller in the industry know about the collective and what steps at minimum do think collective should be taking to ensure these artists are found in paid the royalties that they are due? >> thank you senator. a great question and highlights the problem with the current system. today when the digital company is unable or unwilling to find proper owners of the songs there are loopholes in the law that allow them to use the song without paying and without being liable for richmond. it's been a huge problem in the industry as interactive streaming companies have grown this problem has grown. why 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 that are using the music and what that means is for the first time anywhere in

the world's songwriters will 100% of their world sees and not have the commission taken off the top. that is a major part of this bill supported by songwriters and the major thing that technology companies are doing to help solve this problem. after you try to find the right writers you are not going to be perfect. what this bill does for the first time in the world is created transparent public database of what was found and identified what could not be mad so any songwriter in the publisher, anyone can look into this database and claim what is theirs over period of time. that gives us a second check on the problem. in terms of educating small songwriters are publishers it's a big concern of ours and i'm very proud that every mainstream songwriter has endorsed this bill and is working to help educate their own writers. here in this room we have the national songwriters association

and the songwriters of north america who are committed to making sure that their membership is aware of how the system works and making sure that all the royalties get paid. >> as far as you are concerned the idea is to use the best practices for finding the songwriters and making sure that you have various ways that you can assure that they get a. >> we need to work in partnership with additional companies. they are matching in the neighborhood of 70 to 90% of the revenue they are generating for playing the songs. when i can't ein the owner that creates a problem for both sides. it's a liability for problem for the digital company and a problem for the writer. by coming together to partner in the way that we have to achieve such consensus there's practically nothing else so well with riyadh in the music and technology industry to come together on this bill. >> do you think they should

consider using consulting expertise in the music industry likes we have a vibrant native hawaiian music industry. to ensure that the names are correct in the database because it's very easy to get hawaiian artist names from. and there are specific outreach to make sure they are where the systems. the question is whether someone who is familiar with hawaiian music for example should be part of this collective. >> this new collective would benefit from anyone's help to provide input and one of the great things about this collective is that today if you have problems finding the owner of the song if one service gets the answer none of the other services novell the answer so for example if apple figures out who else is on it doesn't mean

-- with the centralized collective once you solve the puzzle piece it is solved for everything and that combined with the fact that we are the first in the world taking a music database in treating it not as proprietary but rather in the public document that anyone can look at and correct would be a major. >> mr. chairman may i just ask one more question? in 2015 "the wall street journal" noted some streamlining services typically fail to pay songwriter world sees the 15 to 20% of the song. what would you consider to be a successful rate in paying songwriters for this new licensing collective? team to 20% of songs are being played without royalties.

is that an acceptable percentage for you? >> it is not. our goal is 100%. i know we will all sure that. there are some actors in the industry to do a fairly good job at 90% but by working collectively the way were doing and making the data publicly have a chance to improve upon what any individual company does today so i'm confident we will be able to reach the max rate that is higher than any match in the market. >> just to make sure that happens to think we should increase the timeframe to claim royalties from two years to 5 years? >> i don't remember the timeframe only starts after you try the match so what's the date is reviewed by this new collective they are going to do their best job to match it with all available tools. it's only when they fail to match it that the clock start running for that three-year period and the greater period was chosen chosen because it mirrors the statute of

limitations. >> senator klobuchar at. >> thank you very much senator hatch and thank you for your work on all of this and thank you for you. if i wasn't working on this bill given i am from the status prince and bob dylan. we miss prince greatly. i literally dressed up as "purple rain" once for a halloween party and took succor and. also i live two blocks from fourth street so i was trying to compete with senator kennedy with lyrics that i decided i didn't want to freak out senator hatch. [laughter] >> i was at that. >> instead i went with something i thought you could use for some

of her colleagues if you need to from a famous bob dylan song, the times they are changing. don't stand in the fairway, don't block up the hall. you can say that to them if they are not supporting her bill so there you are. i was going to ask you about competition and what you think these -- how these reforms would affect their competition in the industry. >> the best way to have competition is to remove the compulsory license but we know that's not happening anytime soon so the competition is allowed for within the bill basically doesn't change the nature of how you license a mechanical royalties. just changes the nature of how you find the order and compensate them. with regards to the performance space you do still have to actors that are regulated by the justice department in the free market but at least it puts

those actors who are regulated to make decisions and when they go to court and won a single judge gets a telesongwriter the value of their intellectual property at least that judge can take into consideration evidence about what that entity is paying for the other coppery which they are not allowed to consider. we think it improves on the competition but there is work to do. >> do think he could make more work available at the legislation is passed? >> for digital services that clearly gives them permission to use all work immediately which is a great improvement in the current law. if you are a small or interactive streaming company responsible for finding owners of every song in your database that can be a huge disadvantage against the giant technology companies who have more resources to do that. it gives everybody the ability to use all of that without any worry of infringement. so one reason the internet

association and fema has endorsed it. >> mr. harrison can you speak to the current uncertainty in the licensing system and how it can result in money spent instead of money going to artists and songwriters and performers? >> sure. as david indicated earlier it's often the case that digital media service doesn't know who the copy writer is when the music is available on the sir is -- service. that can lead to services either deciding they go to market with a less than complete catalog or insert and circumstances risk copyright infringement litigation. this is one of those situations where money spent on lawyers defending litigation suits is money not going into either paying artists are frank wade into software engineers or

salespeople who can build ads generate revenue for artists and songwriters. part of the reason they are behind the music modernization act is to create that business certainty which will allow us to allow our members to invest more in the products and services that we deliver to consumers. >> how do you think the bill if and when it passes will change the way the next wave of digital producers can get started? >> so it began because of the uncertainty, certainly there are smaller players that aren't members of dema who say we don't assess much of the market because the business uncertainty make it an unwise investment for us so having a blanket license removing the business risk is going to cost not only my existing members to invest more

in their products and services that it will encourage that next wave of entrance. >> to qualified senator kennedy's -- mr. del beccaro how important are the pre-1972 songs and music choice pandora and spotify what percentage are pre-1972 songs? >> i can answer for the other companies but they are very important to us and i should note that we have always paid on pre-1972 songs. we support it fully and in fact we support the full federalization that artists get paid. i should also note that her company paid copyright to the music companies before the copyright law. it's not related to anything anyone is talking about related to songwriters. we fully agree songwriters need better in more fair compensation. our problem is this law which

wipes out companies like ours that has nothing to do with songwriter compensation is only related to music companies and none of it to artists whatsoever. i would just ask that the senator considered that one clause. songwriter should be paid for pre-1972. we agree fully. >> i think i will put a question on the air for you and the consent decrees and you touched on the methods of them but there were also concerns that there is nothing to replace them on the stability of the market and i hope it's something we'll be looking into going for it. i will end with you mr. robinson. i know my girl and i second that emotion were recorded before 1972 and since they didn't

receive copyright protection could you speak about the importance of having these recordings protected by federal law and more importantly how this moves forward for less well-known artists? >> is very important to me as a songwriter especially because you mentioned my girl and as far as internationally i think my girl should become my international anthem. we play my girl and countries where the primary language is not english and people know it. it just doesn't make sense. i just think that it doesn't make sense and it could be rectified. there are a lot of writers in that category. >> 100 points is that music is one of her best exports and its

literally bringing in money all the time and the money should go to those a rep the song. >> absolutely and i have yet to meet a person in my life who doesn't like any kind of music. i think music is an essential part of our lives to compensate. >> i agree. i want to thank you and end with the song but i started with and thank you for shaking her windows and rattling our walls with this issue and coming to our attention year after year and finding a solution but also just in general doing that with your lyrics in your song so thank you very much. >> thank you senator. i would like, we have talked about how the music modernization act will benefit songwriters. i would like to just ask you mr. harrison how would benefit

the digital music industry of which you represent. how would it benefit the tech industry more broadly and what sort of difference will the bill make in places like california, washington and i'll swear where there is significant digital music presents? >> while senator off the top of my head i think all but one of my members have their headquarters either in california or washington and the one that doesn't have their headquarters in one of the states has a large office there. with those two states in particular yes our membership is well representative. what the music modernization act does from the digital providers perspective is eliminate business risk and that business risk results in either reducing the catalog that is made available to consumers. it produces investment and

products and services that are provided to consumers and so by eliminating that business risk what we are doing is we are encouraging digital music or fighters to invest in new products, new services, create more compelling listening experiences for consumers create more option of digital music services that ultimately ends up paying more money to copyright owners creators artists and songwriters and that is the next wave of creation. >> i don't see anybody else here so i can ask one more question if you. why is transitioning to the willing selling standards such a key point in office and how do you respond to critics who say the eta 1b standard is better than the willing buyer or vote -- willing standard.

what they mean is they can pay songwriters less. it's an insult on top of an insult to songwriters have intellectual property taken under compulsory license for they have no choice. they are not in a market where they can say no. then when you set their rates they are told the standard to set their rates ought to be done in a way that purposely gives you a rate less than what you'd able to achieve if they weren't in the market. the willing buyer and willing sellers stand this crucial you are going to keep them in a compulsory license so every 5 years it tells songwriters with the value is of their songs can take into account what the songwriter could achieve if they were like every other creator and copyright are that gets to set their prices and in a free market. for those fighting to protect the standard i find it so interesting because in addition to wanting to preserve a

compulsory license and it titian to want to preserve the creators for themselves they want their competitors to pay willing seller, willing buyer so if they would pay willing seller, willing buyer. if a competitor were launched today they would pay willing seller, willing buyer. it's just because of his work in 1990 5 congress decided to somehow ran father in companies that today the justification for it makes no sense. we don't know what the outcome will be to now set songwriter prices but we are hopeful that it will lead to more fair rates for songwriters and those are the people on the panel who agreed to songwriters deserve better compensation. >> thank you so much. i have to say this has been a particular good panel and help

wring us to understand this and if i have interpreted correctly every member of this committee who has shown up here today is for solving this problem. i hope that we can move ahead and get this problem solved as it really is unjust the way it works as far as i'm concerned and i think we can make it a much better system with a lot or incentives than we have today and create a situation where a lot of our talent can get involved and we will all benefit from more talented more and more opportunity etc.. i just want to thank you all for being here and each one of you has been an excellent witness here today and we really appreciate it. >> i just want to thank you and senator feinstein had to be pulled pulled pulled out but she was a thank you well and i think you see some great bipartisan work that is going on and i

think that just shows how important this cause is. we look forward to getting this done in resolving any differences so thank you very much. .. >> thought a baby because of the testimony from all of you today. were very appreciative that you've, and helped us understand this better. i've been a fan for years. it's nice to be able to read me to talent like you. not that you others don't have help and to realize you're just a regular joe like a lot of us. >> i was going to tell gladys you said hi.

>> all i can say is the little bit that i have done in the music world has been a lot of fun for me. i did not realize i could write lyrics, from there i met other people coming to me and i know i'm not a nearly. >> i have your collection. >> i'll be the lyrics. >> i'm afraid it would be too racy. [laughter] >> this is probably be a good time to end. >> it's wonderful to have you here. i appreciate you taking the

time. hopefully we'll get the bill passed and it will be a big step in the right direction and then we can work on some of the other things we shouldn't have done. god bless you and we appreciate you. >> we will now close this hearing. [inaudible conversation] [inaudible conversation] [inaudible conversation] [inaudible conversation] [inaudible conversation] [inaudible conversation]

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[inaudible conversation] [inaudible conversation] [inaudible conversation] [inaudible conversation] [inaudible conversation] [inaudible conversation] >> this week, the white house did not release a presidential weekly address.