Historical Royalties

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.

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.

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 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.