MLC Distributes $2B in Royalties; Files Designation Review

The Mechanical Licensing Collective (The MLC) announced that its total royalties distributed have now exceeded $2 billion. The MLC reached this significant milestone in just over three years since beginning full operations. The MLC has now successfully completed 36 monthly royalty distributions to date, every one of which has been on time or early.

The MLC also announced that it filed its initial submission to the United States Copyright Office in connection with the first periodic review of the designation of The MLC and Digital Licensee Coordinator (DLC) by the Register of Copyrights. The Music Modernization Act (MMA) of 2018 requires the Register to review the designations of The MLC and DLC once every five years.

The next step in this periodic review process will be a public comment period. The deadline for members of the public to submit their initial comments is May 29, 2024. As a non-profit organization committed to serving its members, The MLC has consistently sought feedback from its members throughout the first three years of its operations.

The MLC looks forward to receiving additional feedback from those individuals and organizations that choose to file comments and welcomes the participation of its stakeholders in the public comment process.     

The MLC serves as the statutory mechanical licensing collective envisioned in the MMA. The MLC is responsible for administering the blanket compulsory mechanical license available to eligible streaming and download services (DSPs) in the United States that was created according to the MMA. The Register originally designated The MLC and DLC in July of 2019. 

During the initial designation process, The MLC was the only entity that met all of the criteria established by the MMA to qualify for designation to serve as the statutory mechanical licensing collective. The MMA states that the collective must be:

• 1.A nonprofit entity, not owned by any other entity, that is created by copyright owners to carry out its statutory responsibilities;
• 2. Endorsed by, and receive substantial support from, musical work copyright owners that together represent the majority of the market; and
• 3. Able to demonstrate to the Register that the entity has the administrative and technological capabilities necessary to carry out a wide array of responsibilities associated with administering the blanket license.

As part of its initial submission in the current periodic review of designation process, The MLC stated that it has once again successfully met each of these criteria in its first three years of operation. The MLC maintains its status as a nonprofit organization, which is funded entirely by DSPs at no cost to songwriters or music publishers.

Additionally, The MLC has received endorsements from owners of musical copyrights representing the overwhelming majority of the market.

Finally, The MLC has demonstrated that it possesses the administrative and technological capabilities necessary to carry out all of its responsibilities under the MMA, including enabling more than 50 DSPs to secure the compulsory blanket license, establishing a public database of musical works ownership data that now contains data for more than 35 million songs, conducting extensive outreach and educational activities that have enabled The MLC to enroll more than 38,000 members based throughout the United States and around the world, and building a royalty distribution process that has enabled The MLC to complete 36 on-time monthly royalty distributions and achieve total royalties distributed of more than $2 billion.

“We welcome this periodic review of The MLC’s designation as required by the MMA and view this as yet another valuable opportunity to surface feedback from the members we serve,” says The MLC’s CEO, Kris Ahrend.

“We are proud of the many milestones we have achieved since launching The MLC’s full operations, particularly the milestone of exceeding $2 billion in total royalties distributed. Our team has worked incredibly hard to realize the revolutionary vision Congress set out in the Music Modernization Act. We are committed to continuing to improve upon the successes we have achieved to date, in order to serve our members even better over the next five years.”

In addition to the accomplishments highlighted above, The MLC has matched over 90% of the mechanical royalties it has received to musical works in its public database, and The MLC has effectively illuminated the “black box” for digital audio mechanicals by giving members the ability to search all of its data for the remaining unmatched royalties and propose matches of those unmatched royalties to the works they have registered using The MLC’s Matching Tool. 

The MLC’s public database search tool allows anyone to search the ownership data The MLC has compiled for the more than 35 million works, completely free of charge. The MLC also has a world-class support team that provides live, one-on-one support to its members and prospective members 10 hours a day, five days a week, via phone, e-mail or chat.

While the blanket license The MLC administers is only available to eligible services operating in the United States, The MLC is charged with finding and paying rightsholders wherever in the world they are located. To do that, The MLC has established membership connections with more than 100 collective management organizations (CMOs) around the world that represent songwriters and publishers located in nearly 130 countries. 

Rightsholders based outside the United States have registered more than 10 million works in The MLC’s database, accounting for nearly one-third of the works in the database. 

The public can file comments on The MLC’s and DLC’s submissions by May 29, 2024, and can reply to other initial public comments by June 28, 2024. The MLC and DLC will have the ability to file replies to the comments by July 29, 2024.  For more information about the periodic review process or to learn how to submit comments, please click here.