Among the proposed changes, the legislation codifies producers and engineers as copyright holders, meaning both would receive digital royalties when songs are played on streaming services. Currently, producers are not included in copyright law and must negotiate their own payment deals.
For hip-hop producers, especially, the current setup often results in a flat-rate purchase fee, leaving the producer without any claim to future streaming revenue. When producers do negotiate royalty deals, they're typically taking a cut from the performer's own royalties.
The Music Modernization Act also creates a new music licensing organization, run by publishers and songwriters, that will identify a song's copyright holders and manage royalty payouts. That work is currently handled by digital platforms themselves, who have frequently been sued over unpaid royalties. The bill also extends copyright protections for pre-1972 recordings.