New U.S. Copyright Rules in Sight Can Change the Music Industry Considerably
Updated: 12 hours ago
What you’ll read in this article:
A new bill introduced in the Congress of the United States on January 26, 2023, proposes changes in the duration of copyrights. If you make money from music, you should care.
In this article, we will take a look at how Intellectual Property (IP, which includes songs and music recordings) can be affected by the new copyright law, and how the new rules proposed can impact the music industry.
What the new copyright bill is about
Copyrights protect musical, artistic, literary works, and other works of authorship, by granting exclusive rights to their authors for a limited time before expiring and going into the public domain.
In the U.S., copyrights last for 70 years after the author’s death or 95 years after the work’s first publication, when the author is made known. If the copyrighted work is a work for hire or was published anonymously, the copyrights last for 95 years from the year of its first publication or a term of 120 years from the year of its creation, whichever expires first.
However, the Copyright Restoration Act of 2023 aims to shorten these time limits. The new term would be 28 years from the day the copyright was originally secured.
The copyright holder would also be “entitled to a renewal and extension of the copyright in the applicable work for a further term of 28 years if the holder applies for that renewal and extension during the 1-year period before the expiration of the original term of the copyright under that paragraph.”
Will the new bill pass?
If the Copyright Restoration of Act of 2023 passes, it would bring the U.S. back to the Copyright Act of 1909, which determined the same 28 + optional 28 rule.
The new proposed rule would not apply to existing works secured before May 1st, 2023, unless the copyright holder is a company:
with a market capitalization of more than USD 150 billion;
classified under NAICS Codes 5121 (production and distribution of video and audio, and services alike) or 71 (arts, entertainment, and recreation) or is engaged in substantial activities for which one of these codes could be assigned.
Like, for example, Disney. And that’s what can make things complicated.
Disney has been in a “copyright war” with the U.S. Congress for some time, under the perspective of the expiration of rights to works and characters such as Mickey. This new bill was filed with Disney in mind: its sponsor, Congressman Greg Steube, said Disney should “no longer benefit from special favors created by establishment politicians”, and the new rules “will remove their special privileges and even the playing field for all entertainment companies”.
But Disney isn’t only the subject of controversy here.
Franklin Graves*, a technology, media, and IP attorney based in Nashville says that the Copyright Clause Restoration Act of 2023 may violate the Constitution of the U.S. and more, including international treaties.
One of these treaties is the Berne Convention, which establishes a general rule of a minimum of 50 years after the death of the author for copyright duration.
Therefore, if the bill passes, it would also mean that authors in the U.S. will enjoy fewer rights than foreigners.
In a LinkedIn post, Graves also points out the oddness of the initial start, given that “copyright law has historically been applicable based on a calendar year starting January 1 through December 31”.
Picture credit: Soundtrap, via Unsplash
How a smaller copyright protection term can affect the music industry
Because compositions (music and lyrics) and sound recordings are protected under copyright laws, the new “28 + 28-year rule” could affect the music industry in many different ways. Let’s tackle some:
Profitability
Under the new copyright law, it could take a maximum of 56 years until a song or recording enters the public domain in the U.S. It means a smaller time slot for creators and music rights holders to profit from their music.
Let’s say a young artist like Olivia Rodrigo puts out a new album after May 2023, when she’ll be 20 years old. By the time she’s 76, the rights holders for these masters would not make money from these tracks anymore.
Because copyright duration impacts the ROI (Return on Investment) of music rights investments, the value of music catalogs can decrease under the perspective of a smaller potential for profitability (which impacts ROI).
Take the case of Justin Bieber. In 2023, it was reported that the singer-songwriter sold 100% of music rights over songs released by December 31, 2021. Many analysts and music writers believe Bieber’s decision was smart since he is still young and holds a massive, loyal fan base. Besides enjoying the liquidity of the catalog deal, he could make new music at any moment and reap the fruits from it. However, if the bill passes, Bieber’s music secured after May 1st, 2023 under U.S. laws** would enjoy a lesser time of protection, and that could impact any potential negotiations of his post-2023 music catalog if he ever wants to repeat the move.
The songs from Justin Biebers’ Justice were part of a USD 200 million deal with Hipgnosis Music Fund, which also includes all Bieber works released by the end of 2021
Clearance
A shorter wait for music to enter the public domain is good news for songwriters and producers. They would increasingly enjoy a bigger catalog of songs and records they could sample or interpolate freely.
As well as sampling and interpolation, all kinds of derivative works in music (such as translations, and parodies) would become a lot easier.
In that sense, the new copyright rule could reduce costs with clearance in music projects. And because copyright infringement lawsuits have been so frequent in the music industry in the last years, a perspective of easier use of music in derivative works could also come as good news.
As we can see, there are pros and cons of a smaller copyright protection length, and many reasons why the bill might or might not get ahead. As of the date of this article’s upload, the bill has not progressed past its introduction to the U.S. Congress, but we shall wait and see how it will turn out.
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What do you think about the potential new copyright rules?
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This content was written based on the information made available on the Library of Congress website and other legal and informational texts until the date of its publication. Please note that this content is published for informational purposes only and does not constitute legal or financial advice.
*Words by Franklin Graves were cited with permission and expressed in his personal social media profile without any specific remarks to the music industry. Comments and analysis are our own.
**Justin Bieber was born in Canada but releases music in the U.S.
