The MLC administers blanket mechanical licenses to eligible streaming and download DSPs in the United States. The MLC is not involved in any other types of licenses or royalties, including public performance licenses or royalties, synchronization licenses or royalties, or record royalties.
Record companies will still need to secure mechanical licenses and pay mechanical royalties for mechanical uses of musical works in physical products, like CDs and vinyl records. Under the U.S. copyright law, the blanket licenses The MLC will issue could include permanent download use, but the DSPs could also continue to rely on record companies to provide those licenses and pay those royalties.
The Harry Fox Agency (HFA) and ConsenSys were selected by The MLC Board after an extensive RFI/RFP process, to help build The MLC Portal and leverage HFA’s existing data set.
An RFI process was initiated in November 2018, resulting in submissions from over a dozen technology companies. A thorough review of responses to the initial RFI was undertaken beginning in December 2018. RFI participants were broadly vetted by numerous members of the copyright owner community, including the music publisher members of the Operations Advisory Committee, who, as a group, have experience with each of the vendor’s services and capabilities. Additional input was provided on request by major DSPs, including Amazon, Apple, Google, Spotify and Pandora, each of whom also have significant experience with vendors in this space. The MLC then selected 7 of the companies who submitted RFIs to submit RFPs. The MLC’s team spent thousands of hours collectively evaluating vendors, meeting with them, reviewing technical materials and assessing their experience and capacities. And the end of the review process, HFA and ConsenSys were selected.
HFA is helping us onboard music publishers, administrators, and self-administered songwriters, composers and lyricists, and their catalogs to The MLC Portal, manage the matching of digital uses to musical works, and distribute mechanical royalties. ConsenSys is the software developer, building The MLC Portal.
Starting in 2021, a new entity called The Mechanical Licensing Collective (The MLC) will collect digital audio mechanical royalties from eligible streaming and download services in the United States who elect to secure blanket licenses from The MLC. The MLC will strive to ensure that music publishers and self-administered songwriters, composers and lyricists receive their share of the mechanical royalties that The MLC collects from these services accurately and as soon as possible.
While our headquarters is in Nashville, we also have team members based in other cities. We already have team members based in Los Angeles, Miami, New York City and London. We will strive to reach the music publishers and self-administered songwriters, composers and lyricists we serve wherever they are located.
The MLC has already begun building its team and operations, and we continue to grow each month. Work is also well underway developing The MLC Portal and royalty processing systems.
Despite the COVID-19 pandemic, The MLC remains on track to begin issuing blanket licenses to DSPs in January 2021. The MLC expects to begin receiving blanket license royalty payments from DSPs in February 2021 and will then begin matching and distributing those royalties.
The DSPs send sound recording usage data, and accompanying mechanical royalties, to The MLC on a monthly basis. The MLC then matches the usage data to the musical works data in The MLC database. Once the data is matched, The MLC pays out the mechanical royalties to music publishers, administrators, and self-administered songwriters, composers and lyricists.
Songwriters, composers and lyricists who have assigned their right to collect mechanical royalties in the United States to music publishers or administrators receive mechanical royalties directly from the music publisher or administrator.
The MLC’s public database will allow anyone to see the musical works data we have compiled, regardless of whether they are registered users of The MLC Portal.
No, The MLC does not keep a portion of the mechanical royalties it collects to cover its operating costs. The operational costs of The MLC are paid for by DSPs through an administrative assessment set by the United States Copyright Royalty Board. The MLC distributes 100% of the mechanical royalties it collects.
The Music Modernization Act of 2018 offers a limitation of liability for past copyright infringement to those DSPs who turn over to the MLC all of their historical unmatched royalties by February 2021. As a result, The MLC expects to receive historical unmatched royalties from DSPs. We will then begin working to match the unmatched uses to the corresponding musical works and pay the corresponding royalties to the proper copyright owners.
The MLC is engaged in many different outreach activities. These include working with music industry organizations to get the word out to their members in newsletters, webinars, and social media posts; holding information sessions at music industry conferences; advertising and securing editorial coverage in music-focused online and print publications; working with companies who provide goods or services to music publishers and songwriters, composers and lyricists; and providing educational content to organizations dedicated to teaching music publishing to songwriters, composers and lyricists and future music industry professionals.
We have begun extensive outreach to a variety of music industry organizations. If you represent an organization that would like to explore ways to work with us, please contact us at marketinginfo@TheMLC.com .
The MLC's musical works data will be publicly available in bulk and can therefore be copied and incorporated into other industry databases.
The MLC does not have any current plans to incorporate blockchain technology into its systems.
While it is not currently possible to connect to The MLC database using an API, The MLC is planning to develop that capacity in collaboration with the international standards setting organization DDEX. When further information is available, we will update this answer.
No, you do not need to affiliate with the Harry Fox Agency (HFA) in order to receive mechanical royalties from The MLC.
While The MLC is the only entity that will administer the blanket mechanical license, other companies will still have the ability to administer voluntary licenses between DSPs and music publishers, including voluntary mechanical licenses for digital uses.
Record companies are not required to directly deliver their sound recording data to The MLC, but to the extent that they may also operate a DSP or music publisher, they may need to do so in connection with those activities.
The MLC has the right to audit each DSP operating under a blanket mechanical license once every three years.
The term “unmatched,” as applied to a musical work (or share thereof), means that the copyright owner of such work (or share thereof) has not been identified or located. The term ‘unclaimed accrued royalties’ means accrued mechanical royalties eligible for distribution under section 115 of the U.S. Copyright Law. The distribution of unmatched or unclaimed royalties will not happen for at least 3 years. In the near term, our focus is on matching as much as possible.
The MLC will not resolve disputes over copyright ownership. Pursuant to the MMA, The MLC will have a policy for placing royalties on hold when a substantiated dispute has been raised, but the parties to the dispute, or the courts, will decide questions of ownership, not The MLC.
The MLC will distribute mechanical royalties on a monthly basis.