Updated Music Copyright Regulations Alter Digital Music Royalties and Copyright Ownership Rights
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The music industry is bracing itself for significant changes with the introduction of a new music copyright law. This legislation, designed to return money to rights holders who have not been paid properly, aims to address the issue of low pay rates for streaming, although it may not fully resolve the problem.
One of the key changes in the new law involves the recognition of a federally recognized property right in an individual’s “digital replica”. This expansion allows artists or their estates to license or assign these digital likeness rights for up to ten years post-mortem, with protection extending up to 70 years after death under certain conditions.
The new law also introduces a centralized licensing system and database to improve matching recordings to rights holders. A new collective will be responsible for holding and distributing unclaimed royalties, and these unclaimed royalties will be held for at least three years by the collective before distribution.
Spotify, a major player in the streaming industry, has implemented a change in its royalty distribution system. Tracks must now reach at least 1,000 streams within 12 months to qualify for royalties; otherwise, those tracks earn no royalties at all. This shift favors tracks with higher streaming numbers and can disproportionately harm independent and smaller rights holders who tend to have many lesser-streamed tracks.
The implications for royalty distribution are far-reaching. Smaller artists and independent musicians risk losing income on low-stream tracks, potentially shifting the royalty pool more towards mainstream or highly streamed artists. However, Spotify's changes are also expected to result in an additional $1 billion in royalties over five years flowing to artists, as a result of cleaning up fraudulent or unproductive streams.
The rise of AI in music creation has underscored the importance of formal copyright registration to protect rights and income in an environment where digital content can be easily copied or manipulated without consent. Registration is critical for enforcement and securing royalties, especially as music and likeness rights broaden under new law provisions like those in the NO FAKES Act.
In conclusion, the new copyright law’s recognition of digital replicas enhances artists' control over their likeness rights, while Spotify's royalty reforms prioritize streams above a threshold to combat fraud and concentrate payments to better-performing tracks. Both developments signify a more complex landscape for rights holders, emphasizing active registration and strategic catalog management to maximize royalty income and protect creative assets.
For a more in-depth analysis, readers are encouraged to visit the article at Pacific Standard. The new legislation is expected to make substantial and important changes in the music industry.
[1] NO FAKES Act [2] Spotify's New Royalty System [3] Spotify's New Rules on the Minimum Length of Non-Music Tracks Eligible for Royalties [4] Spotify's Penalties on Distributors Engaging in Fraudulent Activity [5] The Importance of Copyright Registration in the Era of AI Music Creation
- The new music copyright law, such as the NO FAKES Act, plays a crucial role in securing royalties for artists in an era where digital content can be easily copied or manipulated, especially as AI starts to dominate music creation.
- As the music industry adapts to the new copyright law and Spotify's revised royalty system, artists need to maintain control over their likeness rights and adapt their catalog management strategies to maximize their royalty income from streaming.
