After years of being overlooked by the music industry's rapid adoption of streaming and bigger royalties, independent artists may finally see a bigger slice of the pie, thanks to a new laws that govern digital music and royalty payments.
Back in October, President Donald Trump signed the Music Modernization Act (MMA) — a sweeping piece of legislation that updates copyright laws and ensures that artists will be better compensated for streaming.
While the bill's signing in October was largely eclipsed by a colorful appearance in the Oval Office by Kanye West, the new law has big implications for independent artists, whose music flies under the radar. As streaming devours a larger share of music listening, experts say the MMA could be potentially lucrative for musicians of all stripes, but independent artists in particular.
According to data from BuzzAngle Music, a firm that tracks industry performance, audio streams worldwide skyrocketed by more than 50 percent year over year to more than 376 billion. That growth has been led by platforms like Apple Music and Spotify, both of which have added significant numbers of subscribers over the last few years. It also means independent musicians are likely to get a larger slice of booming music streaming revenues.
The MMA updates current copyright law to fit better into the digital age by doing a few things: It allocates royalties to music producers, updates licensing rules for streaming to make sure rights-holders are paid in a more efficient fashion, and ensures that artists receive royalties on songs that were recorded before 1972. The act creates the Music Licensing Collective, an organization that is slated to start collecting and distributing royalties starting in 2021.
James Donio, president of the Music Business Association, a non-profit that aims to advance and promote music commerce across delivery models, predicted that the MMA would have a positive impact on all artists, including independent ones.
"This is going to change the landscape of the music business." Donio told CNBC recently.