What You Should Know about the Mechanical Licensing Collective (The MLC)
You may have heard or read about The Mechanical Licensing Collective — or The MLC — at some point over the past few years. And if you have music that is being streamed or downloaded by consumers in the United States through digital service providers (DSPs) like Spotify and Apple Music, it is important that you have a basic understanding of what The MLC is, what it does and how it works with international rightsholders including ex-US CMOs.
The MLC may still be a relatively new music industry organization, but it has already become an important ally for songwriters, publishers and CMOs, helping them get paid the mechanical royalties due to them when their music is streamed and downloaded in the U.S.
Origins
The MLC was established by the Music Modernization Act of 2018 (MMA), historic legislation passed by the United States Congress designed to bring greater efficiency and transparency to mechanical licensing and ensure that all rightsholders are paid the mechanical royalties they are owed for streams and downloads of their music accurately and on-time.
Prior to The MLC being operational, digital mechanical licensing in the U.S. was largely done on a songby-song basis. But with countless songs on dozens of platforms, it was virtually impossible to obtain licenses for every use of every song, making it almost equally as impossible to deliver royalties to rightsholders properly (or in some cases, pay them at all).
The MMA changed the process of mechanical licensing and related royalty collection. It created a new blanket compulsory mechanical license that DSPs could operate under that would cover all the music they make available on their platforms. It also created a new organization (The MLC) that, funded by the DSPs, would be exclusively responsible for administering this new blanket license, paying royalties due under the license and establishing and maintaining a publicly accessible musical works ownership database.