Royalties being distributed to copyright owners
Copyright owners – publishers and songwriters — can celebrate this month. The Mechanical Licensing Collective (MLC) made its first regular payment distribution to publishers in April, according to a statement by Nashville Songwriters Association International (NSAI).
The statement said: “NSAI is proud of our involvement in crafting and passing the Music Modernization Act, which created the MLC and streamlined the way digital mechanical licenses are issued and royalties distributed. This distribution marks a historic moment in music history and we look forward to the continued success of the MLC in matching copyright owners to digital usage while providing transparency and stability in the digital mechanical landscape.”
The distribution included royalties from the use of musical works by U.S. digital service providers (DSPs) during January 2021. It did not include any historical unmatched royalties, according to a statement at the MLC website.
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The distribution process started in February when DSPs began reporting their streaming and download usage data for January 2021 to The MLC. The royalty pool for all usage data reported to The MLC totaled more than $53 million when calculated at the applicable statutory rates.
The MLC was then able to match approximately 80 percent of the royalties reported to musical works registered in its public database, a figure that is in line with industry benchmarks for initial matching results. Once the matching work was completed, The MLC established which uses were covered by voluntary licenses between the DSPs and copyright owners – a substantial portion in this case – and thus needed to be carved out of each DSP’s blanket license.
$40 million mechanical royalties collected
After carving out the matched uses covered by voluntary licenses, The MLC determined that the remaining amount of mechanical royalties owed by DSPs to the MLC totaled more than $40 million, which The MLC successfully collected. Those royalties were then included in the monthly distribution process, the results of which are as follows:
- $24 million in matched royalties was paid by The MLC to its Members;
- $16.4 million is currently pending distribution as follows:
- $4.9 million in matched royalties related to shares of registered works for which claims have yet to be submitted by a rightsholder/ MLC Member;
- $500 thousand in matched royalties on legal hold; and
- $11 million related to usage that The MLC has not yet been able to match to the musical works in its public database.
All of the royalties currently pending distribution will accrue interest until they are distributed, as required by the MMA.
About The MLC
The Mechanical Licensing Collective (The MLC) is a nonprofit organization designated by the U.S. Copyright Office pursuant to the historic Music Modernization Act of 2018.
In January 2021, The MLC began administering blanket mechanical licenses to eligible streaming and download services (digital service providers or DSPs) in the United States. The MLC will then collect the royalties due under those licenses from the DSPs and pay songwriters, composers, lyricists, and music publishers. The MLC has built a publicly accessible musical works database, as well as a portal that creators and music publishers can use to submit and maintain their musical works data. These tools will help ensure that creators and music publishers are paid properly.
Preshias Harris is a music journalist and music career development consultant with the emphasis on new and aspiring artists and songwriters. Her book, ‘The College of Songology 101: The Singer/Songwriter’s Need to Know Reference Handbook’ is available at www.collegeofsongology.com Follow her blog at www.nashvillemusicline.com