Transfers of Historical Unmatched Royalties



Historical Unmatched Royalties Update

The first set of historical unmatched royalty data was uploaded to The MLC Portal on May 26, 2022. Members can search this first set of historical unmatched data — data that remained unmatched after we completed our initial matching processes — using the Matching Tool in The MLC’s Portal. This initial set of data consists of all the remaining unmatched data for all historical time periods from the following six DSPs: Deezer, Hoopla, Pandora, SoundCloud, Tidal and iHeart.

Now, when Members use the Matching Tool to search for unmatched data that corresponds to their musical works, they will be searching the data from these six DSPs for both the remaining blanket unmatched data and the remaining historical unmatched data. To provide greater transparency around this process, unmatched usage data will now be identified in the search results within the Matching Tool as follows:

  • An “H” icon will indicate historical unmatched usage that took place before January 1, 2021 (the blanket license effective date)
  • A “B” icon will indicate blanket unmatched usage that took place on or after January 1, 2021
  • Search results that display both icons will identify unmatched usage that took place both before and after January 1, 2021 

To the extent Members propose matches that cover data from any of these six DSPs, once accepted, The MLC will reference these matches when we process (or reprocess) blanket royalties and historical royalties in future distributions. We invite our Members to continue to Play Your Part™ by matching your registered works to the new unmatched historical data now found in The MLC Portal.

Where We Began

In order to launch full operations at the beginning of 2021, as required by the Music Modernization Act of 2018 (MMA), we began by building the systems and capabilities needed to receive and process the data required to distribute blanket royalties. This work allowed us to complete our first monthly royalty distribution on time in April of 2021. Since then, we have completed monthly royalty distributions — all on time or early — and as of May 2022 we have distributed more than a half a billion dollars in digital audio mechanicals to our Members.

At the same time, we established our public database of musical works data, launched our Matching and Claiming Tools, and invited you, our Members, to Play Your Part™ by reviewing the data in our database, registering any missing musical works, and supplementing the data we had for your existing works where needed. Since these tools were launched, you have answered our call, enabling us to process millions of new works registrations and add data for millions of new unique works to our database.

With the blanket royalty distribution process firmly established, we shifted our focus to the historical unmatched royalties. On February 16, 2021, The MLC announced that 20 DSPs transferred a total of $424,384,786 in accrued historical unmatched royalties to The MLC. The DSPs also provided The MLC with initial sets of usage data related to historical unmatched royalties. Read The MLC’s press release on these transfers here.

On June 15, 2021, 15 DSPs provided The MLC with additional usage data pertaining to historical unmatched royalties, supplementing the data they sent to The MLC as part of the February 2021 transfers. By the end of summer 2021, The MLC had received more than 4,000 data files from the 21 DSPs that transferred historic unmatched royalties. 

Starting in fall 2021, we began methodically reviewing, ingesting, and preparing the historical unmatched royalty data we had received. In spring 2022, we completed our work on the first set of historical unmatched royalty data files and began running that data through our internal matching processes.

What Happens Next?

Now that we have completed the matching process for this first set of historical unmatched data, we can begin distributing historical royalties that we were able to match from this first set. We will start with uses for which DSPs did not previously pay any royalties, and we will begin by paying out those royalties for uses that took place during the Phonorecords 2 rate period (i.e., January 1, 2013 to December 31, 2017). These royalties will begin to be included in our monthly royalty distributions beginning in June 2022.

 

As we complete our internal matching processes for additional sets of historical unmatched data from other DSPs, we will add the remaining unmatched data from these additional sets to our database so that Members can search that data using the Matching Tool. Then we will begin distributing the “matched” historical royalties from these other DSPs, too — again, starting with uses that took place during the Phonorecords 2 period, for which DSPs did not previously pay royalties to any rightsholders.

What about Royalties for Phonorecords 3 Uses?

The Copyright Royalty Board (CRB) has not yet issued final rates for the Phonorecords 3 period (i.e., January 1, 2018 to December 31, 2022), though we are hopeful the CRB will issue those rates soon. Once the CRB issues final rates for the Phonorecords 3 period, we will immediately assess the extent to which DSPs will need to deliver any additional data and royalties. Once we receive any additional required data and royalties, we will begin processing the new data with the goal of beginning to match and then pay out royalties for uses that took place during the Phonorecords 3 period as soon as possible.

What About Historical Unmatched Money That Doesn't Get Matched/Claimed? 

The MLC is now actively trying to match as much of the historical unmatched royalties as it can to the registered works in our database. Once matched, The MLC will then process and distribute the matched royalties. While the law requires The MLC to continue to attempt to match the remaining historical unmatched royalties at least until 2023, there is no deadline that cuts off The MLC’s efforts to match, and The MLC’s Board of Directors has not made any decisions about when that might happen. When The MLC does eventually exhaust its matching efforts, The MLC will distribute the remaining unmatched royalties to music publishers and self-administered songwriters using a market share/activity-based formula. Music publishers who receive historical unmatched royalties from The MLC must pay AT LEAST 50% of those royalties through to their songwriters. If you are a songwriter represented by a music publisher and you earned digital mechanical royalties during the period in question, you should receive a portion of any remaining historical unmatched royalties distributed to your publisher for that same period.

 

 The Details

The following table provides information on transfers of accrued unmatched royalties (“Transfers”) by DSPs to The MLC pursuant to the Music Modernization Act of 2018 (MMA), 17 U.S.C. 115(d)(10)(B)(iv)(III)(aa). This provision of the MMA required DSPs to transfer to The MLC by February 15, 2021 all accrued royalties for unmatched uses of musical works that occurred prior to January 1, 2021 as one of the conditions of eligibility for a specified limitation on liability for prior infringements. Please note that, if certain conditions are met, the law permits DSPs to adjust the amount of accrued unmatched royalties they have transferred to The MLC (see, e.g., 37 CFR 210.10(k)). 

The MLC is required under the MMA to engage in diligent efforts to publicize any Transfers (or Transfer adjustments) made by a DSP throughout the music industry. 
 
DSPs that make Transfers (or Transfer adjustments) must certify the accuracy of all of the data they deliver to The MLC. The MLC’s acceptance of Transfers, or posting of information on Transfers, does not constitute certification or approval by The MLC of the accuracy of any information accompanying any Transfer, the validity of any certification, or the eligibility of any DSP to make a Transfer or to obtain a limitation on liability.  Finally, The MLC’s posting of that information in this section of our website does not constitute a representation or confirmation of any kind that a DSP has met the legal requirements necessary to obtain a limitation on liability under the MMA for any prior infringing uses.
 
If you have any questions about the information displayed below please contact the DSP directly. 

 

DSP Name Original Date Transferred Original Total Transferred Current Total Transferred
Google, LLC (Google Play Music / YouTube) January 27, 2021 $32,855,221.60 $33,034,563.57
Deezer SA  February 10, 2021 $988,337.55 $988,337.55
SoundCloud Operations, Inc. February 10, 2021 $10,171,725.34 $10,171,725.34
Amazon.com Services LLC (Amazon Music) February 11, 2021 $42,741,507.25 $44,313,424.15
Apple Inc. (Apple Music) February 11, 2021 $163,338,890.04 $165,727,890.23
Aspiro AB (Tidal) February 11, 2021 $6,975,425.39 $6,975,425.39
Mixcloud Ltd February 11, 2021 $13,650.44 $13,650.44
Pacemaker Music AB (Pacemaker) February 11, 2021 $277.73 $277.73
Spotify USA Inc.  (Spotify) February 11, 2021 $152,226,039.20 $149,947,452.02
Weav Music, Inc. (Weav Run) February 11, 2021 $12,710.79 $12,710.79
Xandrie USA, Inc. (Qobuz) February 11, 2021 $106,893.28 $106,893.28
Bill Graham Archives, LLC (Wolfgang's) February 12, 2021 $18,408.94 $18,408.94
Fan Label, LLC (FanLabel) February 12, 2021 $4,748.00 $3,661.95
iHeart Media + Entertainment, Inc (iHeartRadio) February 12, 2021 $1,299,328.30 $1,299,328.30
MediaNet, Inc. (GTL) February 12, 2021 $98,344.79 $98,344.79
Midwest Tape (Hoopla) February 12, 2021 $278,990.69 $278,990.69
Pandora Media, LLC (Pandora) February 12, 2021 $12,362,076.88 $12,362,076.88
Recisio SAS (Karaoke-Version) February 12, 2021 $2,087.18 $2,087.18
Slacker, Inc. (LiveXLive) February 12, 2021 $400,000.00 $925,801.00
Audiomack, Inc February 16, 2021 $490,123.23 $490,123.23
M&M Media, Inc. (Trebel) March 25, 2021 $- $108,557.43
Total    $424,384,787.62 $426,879,730.88