$424 Million Up for Grabs as Music Streaming Services Fill MLC’s Black Box With Unmatched Royalty Payments

Jem Aswad
·4 min read

The Mechanical Licensing Collective announced Tuesday that it has received a total of $424,384,787 in accrued historical unmatched royalties from Spotify, Apple Music and other digital service providers, along with corresponding data reports that identify the usage related to these royalties. In other words, some songwriters and publishers will be receiving a windfall once the MLC reviews and analyzes the data to pay the copyright holders — the MLC anticipates sending out its first royalty payments and statements in April of 2021

According to the announcement, a total of 20 DSPs separately transferred accrued historical unmatched royalties to the MLC, as part of the 2018 Music Modernization Act’s limitation on liability for past infringement. In addition to the accrued unmatched royalties transferred to the MLC, the DSPs concerned also delivered more than 1,800 data files, which contain in excess of 1.3 terabytes and 9 billion lines of data.

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“This is a massive win for music creators and the streaming services themselves,” National Music Publishers Association President/CEO David Israelite said in a statement after the news was announced. “Songwriters and music publishers have for years fought to ensure they were paid accurately and fully by digital streaming services. ‘Unmatched money’ has plagued the industry and today, thanks to the Music Modernization Act, we know that it amounts to just under $425 million – not including money previously paid out in multiple million-dollar settlements. The Mechanical Licensing Collective obtaining this historically unmatched money, doing the research to find its owners, and giving copyright owners a transparent process to claim what is theirs is exciting progress that paves the way for the future growth of streaming that will benefit the entire industry.”

Michelle Lewis, Executive Director, Songwriters of North America, commented: “SONA is pleased to see the Music Modernization Act begin to take effect. This money will now be matched and find its way to the rightful songwriters and publishers that earned these royalties. We encourage all SONA members, along with every songwriter, to go to theMLC.com to learn how they are eligible to join or participate, which is critical to ensuring every writer who earned this money gets their fair share of these royalties.”

Looking ahead, the MLC will provide additional information about historical unmatched royalties on a newly-created page on its website entitled, naturally enough, “Historical Unmatched Royalties.” The MLC receives reports from DSPs, collects and distributes royalties, and identifies musical works and their owners. The MLC also maintains a publicly accessible database of information relating to musical works and, to the extent known, the identity and location of the copyright owners. Registered users will also be able to submit claims for unmatched activity that they believe relates to their musical works.

On Jan. 1, the MLC officially began administering a new blanket license covering musical works available on U.S.-based digital audio services. Before the MMA made such a blanket licensing system possible (for US-based DSPs to distribute permanent downloads, limited downloads, and interactive streams), a song-by-song licensing structure was in place. With countless songs on dozens of platforms, it was virtually impossible to license every use of every song, let alone to deliver royalties to rightsholders in a timely fashion

“The MLC has spent more than a year preparing for the License Availability Date, developing numerous resources for creators and music publishers to help them navigate the changes to mechanical licensing, conducting crucial outreach with well over 50 digital service providers (DSPs) and undertaking a widespread outreach campaign to educate music publishers, administrators, self-administered songwriters and others in the broader music industry about The MLC’s mission and purpose,” said Kris Ahrend, CEO of The MLC. “We have also been fortunate to receive valuable input and guidance from our Board and Committee members – songwriters, publishers and digital service executives themselves – which has helped shape The MLC’s mission and scope of work since passage of The MMA. The arrival today of the License Availability Date marks yet another milestone in the process of making the promises of the MMA a reality, and The MLC team could not be more excited.”

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