When Congress passed the Music Modernization Act (MMA), it required The MLC to eventually distribute any remaining unclaimed accrued royalties, plus interest calculated at the statutory rate, to rightsholders based on their “relative market shares.” This congressionally mandated process is what The MLC refers to as “market share distributions.” The MLC will allocate the remaining royalties on a pro rata basis for each digital service provider (DSP) and offering and then distribute those royalties with interest calculated at the statutory rate.
Looking One Year Ahead: Market Share Distributions
The MLC has started developing the congressionally mandated process for distributing remaining unmatched and unclaimed blanket royalties, with the intent of beginning those distributions in early 2027. We plan to distribute one month of remaining blanket royalties each month, starting with the remaining royalties from January 2021 (the first month that DSPs reported royalties to The MLC according to the blanket license we administer). We will allocate the remaining royalties on a pro rata basis for each DSP and offering, using The MLC’s actual distribution data, and then distribute those royalties with interest calculated at the statutory rate. Every song that earned monthly royalties (whether initially or via reprocessing) will receive its pro rata share of the remaining royalties for that month.
Our Progress to Date
Since launching in 2021, The MLC has focused on empowering rightsholders with unprecedented transparency, powerful tools, education-focused outreach, and responsive service. As a result, we now have more than 76,000 Members and more than 52 million works in our publicly available database. We have also welcomed more than 6,700 songwriters to our Songwriter Hub since its debut last fall.
This focus, along with our Members playing their part, has delivered real results. The MLC has processed over $4 billion in royalties. Our current average match rate for the royalties we have processed to date is nearly 92 percent. Moreover, fewer than 5 percent of the remaining unmatched sound recording resources have accrued more than $1 in royalties across all periods, and of the over 95 percent that have accrued less than $1, their average cumulative value is only between 5 and 6 cents each.
The metrics for our 2021 usage are even more positive. Our current average match rate for all 2021 usage is now 94 percent. Moreover, only a small fraction of the sound recording resources reported in 2021 that remain unmatched — and a similarly small fraction of unclaimed shares of works — have accrued over $100 in cumulative royalties from 2021 usage.
Over the course of this year, we will continue our matching and outreach efforts, so we expect these metrics will continue to improve. Still, with our metrics showing that the incremental improvements are diminishing over time, we are mindful that Congress did not intend for The MLC to hold onto remaining unmatched and unclaimed royalties indefinitely. The planned period for matching and distributing royalties from 2021 will span six years. This is twice as long as the three-year holding period the law mandates.
How It Will Work
Once distributions of the remaining unmatched and unclaimed royalties begin in 2027, we will include those additional royalties in our regular monthly royalty reporting. Members will see these amounts clearly identified in their monthly royalty statements, broken down by DSP and offering, just like we currently report blanket royalties. We will also include metrics for these additional royalties in the aggregate distribution summaries we provide in our Member newsletter, on our website, and in our Annual Reports.
We will allocate the remaining royalties on a pro rata basis for each DSP and offering, using The MLC’s actual distribution data. We will not use estimates. Every song that earned monthly royalties (whether initially or via reprocessing) will receive its pro rata share of the remaining royalties for that month.
The current amount of remaining unmatched and unclaimed royalties from January 2021 that would be eligible to be included in our first monthly distribution in 2027 is less than $7 million, and that remaining amount will likely be even lower (due to continued reprocessing) by the time we complete our first distribution. We expect the remaining amounts that are eligible to be distributed in subsequent months will be comparable. We will also undertake additional matching efforts specifically focused on the remaining 2021 royalties before we begin distributing those remaining royalties.
What About Historical Royalties?
Once the process for distributions of remaining blanket royalties has been successfully launched, we will look to begin processing the remaining historical royalties. As a reminder, in 2021, 21 DSPs transferred to The MLC all of the historical royalties (for periods from 2007 through 2020) they had been unable to match and distribute despite their best efforts. The total transferred was approximately $397 million (at the final rates set by the Copyright Royalty Board). We have made great progress here as well: We have matched over $317 million (or nearly 80 percent) of the historical royalties originally transferred to us to registered works in our database, and we have distributed over $229 million (or nearly 58 percent) of these royalties to the Members who have claimed their shares of those works.
We will share additional details regarding our anticipated timing for the start of our distributions of the remaining historical royalties well ahead of their eventual start date. In the meantime, we will also continue our ongoing efforts to match and distribute the remaining historical royalties over the coming year.
What Rightsholders Can Do Now
As always, we encourage rightsholders to review and update their data regularly to ensure they receive all of the royalties to which they are entitled by:
- Making sure all of their songs are registered with The MLC and using our Works Registration Tools to register any missing songs;
- Using our Claiming Tool to make sure they have claimed their share of any song that was initially registered by another Member; and
- Using our Matching Tool to review unmatched sound recordings and suggest matches to songs in their catalog.
Frequently Asked Questions
Below are answers to frequently asked questions about market share distributions. We will continue to supplement these FAQs throughout the coming year. If you have additional questions, please do not hesitate to contact our Support Team. Publishers and administrators can also direct questions to their contacts on our Publisher Relations team.
“Unclaimed accrued royalties” are royalties The MLC has received and has not been able to match or distribute (despite having attempted to do so) as of the expiration of the statutory minimum holding period prescribed in the MMA. Unclaimed accrued royalties include unmatched royalties and unclaimed royalties.
Unmatched royalties are royalties related to sound recording resources reported by DSPs in the usage reports they provide to The MLC that have not yet been matched to a song in The MLC’s database.
Unclaimed royalties are royalties related to sound recording resources that have been matched to a song, but less than 100 percent of the shares of the work to which those uses have been matched have been claimed by a Member of The MLC. The royalties for shares that have not yet been claimed are called “unclaimed royalties.”
A sound recording resource is a single instance of a sound recording that one DSP makes available for streaming or download. If multiple DSPs offer the same sound recording, each DSP’s version is treated as its own separate sound recording resource because each service reports its own specific data for that recording.
The MMA requires The MLC to hold (and continue efforts to match and distribute) royalties for a minimum of three years before distributing them via the congressionally mandated market share distribution process to rightsholders.
To date, The MLC has made no market share distributions. By the time The MLC makes the first market share distribution, The MLC will have held (and attempted to match and distribute) the unclaimed accrued royalties from 2021 usage for at least six years — twice as long as the three-year holding period set forth in the MMA.
The MLC intends to begin market share distributions in early 2027, starting with remaining unclaimed accrued blanket royalties reported to The MLC for 2021 usage.
This timing is based on the data reflecting The MLC’s progress to date. That data shows that the current average match rate for all 2021 usage is now 94 percent, with several months of 2021 usage exceeding 94 percent. Moreover, only a small fraction of the sound recording resources reported in 2021 that remain unmatched — and a similarly small fraction of unclaimed shares of works — have accrued over $100 in cumulative royalties from 2021 usage. Although the match rates for 2021 usage continue to improve as The MLC continues to reprocess the remaining royalties, the rate of improvement has diminished over time.
The MLC will allocate the remaining unclaimed accrued blanket royalties on a pro rata basis for each DSP and offering originally reported to The MLC in a given month, using The MLC’s actual distribution data, not estimates of market share. Every song that earned monthly royalties, whether initially or via reprocessing, will receive its pro rata share of the remaining royalties for that month.
The MLC plans to distribute one month of remaining blanket royalties in each monthly royalty distribution, starting with the remaining royalties from January 2021 (the first month that DSPs reported royalties to The MLC according to the blanket license The MLC administers).
As of the completion of the January 2026 royalty distribution, The MLC was holding less than $7 million in remaining unmatched and unclaimed royalties from January 2021 usage. This amount is expected to decrease as The MLC continues its efforts to match and distribute royalties from this period in preparation for the first market share distribution in early 2027.
The MLC expects the remaining unclaimed accrued royalties from subsequent months of 2021 usage that are eligible to be distributed via the market share process will be comparable to the amount of those royalties from the January 2021 usage.
For an up-to-date view of blanket mechanical royalties reported by DSPs under the blanket license, including amounts collected, matched, distributed, and more, you can view The MLC’s Blanket Royalties Dashboard here.
Yes. Once market share distributions begin in 2027, The MLC will include those additional royalties in the regular monthly royalty reporting. Members entitled to receive market share distributions will see these amounts clearly identified in their monthly royalty statements, broken down by DSP and offering, just as blanket royalties are currently reported each month. The MLC will also include metrics for these additional royalties in the aggregate distribution summaries provided in monthly Member newsletters, on The MLC’s website, and in The MLC’s Annual Reports.
Once the process for distributing the remaining unclaimed accrued blanket royalties has been successfully launched and is underway, The MLC will look to begin processing the remaining historical royalties. The MLC will share additional details about the anticipated timing for the start of distributions of the remaining historical royalties well ahead of their eventual start date. To see the progress The MLC has made so far distributing historical unmatched royalties, you can view The MLC’s Historical Royalties Dashboard here.
Over the course of this year, The MLC will continue its efforts to match and distribute the remaining unclaimed accrued royalties while also developing the market share distribution process. The MLC will also conduct targeted outreach to try and find rightsholders who are not yet Members of The MLC and may be entitled to receive some of the remaining royalties from 2021 usage, along with targeted efforts to try and match and distribute the remaining royalties from 2021 usage.
Yes. Throughout the course of this year, The MLC will continue to provide updates about the market share distribution process, including the exact timing of the first distribution in 2027. The MLC will also widely publicize the start of these distributions well in advance, in accordance with statutory notice requirements set forth in the MMA.
As always, The MLC encourages rightsholders to review and update their data regularly to ensure they receive all of the royalties to which they are entitled by:
- Making sure all of their songs are registered with The MLC and using The MLC’s Works Registration Tools to register any missing songs;
- Using The MLC’s Claiming Tool to make sure they have claimed their share of any song that was initially registered by another Member; and
- Using The MLC’s Matching Tool to review unmatched sound recordings and suggest matches to songs in their catalog.