The Mechanical Licensing Collective

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On July 8, the United States Copyright Office (USCO) designated the industry-consensus Mechanical Licensing Collective (MLC), created by U.S. music publishers and songwriters and backed by the National Music Publishers’ Association (NMPA), the Nashville Songwriters Association International (NSAI), and the Songwriters of North America (SONA), as the new entity tasked with licensing and administering rights under the Music Modernization Act (MMA).

The Music Modernization Act (MMA), which became law in October 2018, makes important updates to music law and protections for songwriters and music publishers.  The law ensures that the mechanical rights of songwriters and music publishers are properly licensed and royalties fully paid by digital services, and it improves how those royalty rates are determined. It also establishes a publicly accessible mechanical rights database to ensure copyright ownership information is accurate and transparent.

The U.S. Copyright Office released the following statement.

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NewsNet Issue 773
July 5, 2019

Copyright Office Issues Final Rule Designating Mechanical Licensing Collective and Digital Licensee Coordinator Under the Music Modernization Act

The U.S. Copyright Office has designated entities to serve as the mechanical licensing collective (MLC) and the digital licensee coordinator (DLC) under the Orrin G. Hatch–Bob Goodlatte Music Modernization Act (MMA).

The MMA directs the Register of Copyrights to designate a nonprofit entity operated by copyright owners as the MLC, which will administer the statute’s new blanket compulsory licensing system for digital music providers beginning on January 1, 2021. Among other duties, the MLC will be responsible for receiving usage reports from digital music providers, collecting and distributing royalties, and administering a process by which copyright owners can claim ownership of musical works (and shares of such works). The MMA also authorizes the Register to designate an entity as the DLC, which will represent digital music services in the administration of the license.

To make these selections, the Office conducted an extensive public inquiry in which it solicited proposals from entities seeking to be designated as the MLC or DLC, as well as comments from interested members of the public. In response, the Office received over 600 comments from stakeholders throughout the music industry, including numerous copyright owners who provided endorsements for one or more of the entities seeking designation.

Based on this record and the statutory selection criteria, the Register has designated Mechanical Licensing Collective, Inc. as the MLC, and Digital Licensee Coordinator, Inc. as the DLC. The Office looks forward to working with these entities and other stakeholders as the MMA implementation process continues.

Additional information about the designation proceeding is available here.

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From the mlc board:

The MLC Board welcomed the designation saying, “We thank the Copyright Office for its exhaustive analysis of the proposals submitted to build the mechanical licensing collective and we are heartened by its determination that on every requirement MLC was the most qualified and most able to accomplish the statutory responsibilities. The MLC Board and Committees have been working tirelessly to ensure it can successfully fulfill its new role and it is ready to continue this important work as the designee. The future is bright for songwriters and publishers, and we look forward to working with and educating publishers and writers of all sizes, backgrounds and genres across the industry on the MLC and how it can benefit their businesses.”

From nmpa:

National Music Publishers’ Association (NMPA) President & CEO David Israelite praised the Copyright Office’s decision saying, “This has been a long, deliberative process and we are pleased with the result. The Copyright Office set a high bar and the team behind the MLC submission was transparent, thorough and representative of the entire music publishing and songwriting community. We look forward to seeing the benefits of the Music Modernization Act come to fruition. As we now move to the funding phase, it is critical that the digital services commit to supporting the MLC properly and become more transparent, starting with disclosing the amount of unmatched money currently at their companies.”From the nmpa:

From nsai:

“American songwriters have looked forward to this advance in music licensing for years,” said Steve Bogard, award-winning songwriter and President of the Nashville Songwriters Association International (NSAI). “The MLC creates a number of historic gains for songwriters including participation in the governance of a mechanical rights agency on both board and committee levels and being guaranteed an activity-based share of unclaimed funds. We have an opportunity now to work with streaming companies to significantly advance digital mechanical licensing efficiency and transparency.”

From sona:

Songwriters of North America (SONA) Executive Director Michelle Lewis praised the decision saying, “SONA would like to thank Karyn Temple and the US Copyright Office for their efforts and their expertise, and we welcome the designation of the coalition-led MLC as the chosen licensing collective. SONA will remain committed to being a guardian of the MMA, which we and other stakeholders worked so hard to pass. We intend to work with this MLC to help educate all songwriters on the importance of accurate registration and to ensure that a state of the art database be built, serving all entitled parties to receive the royalties they have rightfully earned.”