Rightsholders Receive Payments Under New Blanket License
For the first time, The Mechanical Licensing Collective sent out a monthly round of mechanical royalty payments, distributing over $24 million to its Members based on usage data that American digital service providers reported for January 2021. This marked the inaugural payout under the blanket licensing system established by the 2018 Music Modernization Act, and it excluded any older, previously unmatched royalty funds.
Digital service providers began feeding January 2021 streaming and download figures into The MLC’s system in February, kicking off the reporting cycle. Calculated at the statutory rates that apply, the total royalty pool generated from all submitted usage data exceeded $53 million. The organization then cross-referenced this usage against musical works listed in its public database and succeeded in matching roughly 80 percent of the royalty total, a figure the group characterized as in line with what the industry typically sees during an initial matching round.
How Voluntary Licenses And Unmatched Usage Shaped The Payout
After finishing the matching work, The MLC screened out usage already governed by voluntary agreements struck directly between digital service providers and copyright holders. Because those instances fell outside the blanket license, excluding them lowered what each DSP owed under the blanket framework. Following this recalculation, the organization reported that DSPs still owed upward of $40 million in mechanical royalties, and it confirmed that the full sum was gathered.
Those funds went into the monthly payout. Members received $24 million of that total in matched royalties, while $16.4 million had yet to be released. Of the pending balance, $4.9 million represented matched royalties for registered works whose rightsholders or Members had not yet filed a claim, $500,000 sat on legal hold despite being matched, and $11 million covered usage that the database had not yet been able to match to any registered work.
Per the requirements of the Music Modernization Act, interest will accumulate on these outstanding sums until they are eventually paid out. The organization stated it would keep working to shrink this backlog by linking additional usage to registered works and tracking down rightsholders who have not yet claimed what they’re owed.
Ongoing Data Accuracy And Membership Sign-Ups Remain Key
Current Members are being asked to check their information in The MLC Portal and keep it current, and rightsholders who haven’t yet joined the organization are being encouraged to become Members and register their catalog. Because linking DSP-reported usage to registered works directly determines what portion of royalties can be released right away versus held pending, the group’s public database and portal continue to play a central role in the matching effort.
As an organization, The MLC is responsible for overseeing blanket mechanical licenses covering qualifying streaming and download platforms across the U.S., gathering the royalties those licenses generate, and directing payment to songwriters, composers, lyricists, publishers, administrators, and collective management organizations. On a monthly basis, DSPs licensed under the blanket system forward both usage figures and royalty payments to The MLC, which then matches the reported plays and downloads to registered compositions before issuing monthly distributions.
Executives Frame The Payout As Delivering On The MMA’s Promise
Board of Directors chair Alisa Coleman remarked that wrapping up the first month of royalty processing and delivering more than $24 million straight to rightsholders represented a further milestone in bringing the Music Modernization Act’s goals to life. CEO Kris Ahrend noted that this payout demonstrated the organization was now living up to its core purpose: making certain rightsholders collect the correct share of blanket mechanical royalties remitted by DSPs.
According to The MLC, details on upcoming distribution timelines and scheduling, as well as guidance on when royalty figures might be revised, can be found in materials it has already published on royalty distributions. The group added that it would keep working through the backlog of historical unmatched royalties it received back in February, all while maintaining its regular monthly cycle of collecting and distributing royalties tied to current DSP usage.
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