Songwriter Universe: Kris Ahrend, CEO of The MLC, Discusses How It Collects and Distributes Streaming and Download Royalties

Kris Ahrend, CEO of The Mechanical Licensing Collective (The MLC), Discusses How It Collects and Distributes Streaming and Download Royalties

Over the past decade, digital music streaming royalties have increasingly become a vital income source for songwriters and music publishers. And with the shift in mechanical royalties from physical to digital, the creation and launch of The Mechanical Licensing Collective (The MLC) has become an important new development in how songwriters and publishers get paid.

Based in Nashville, The MLC was established by the historic Music Modernization Act of 2018 (MMA), which sought to create a more efficient and effective way for digital service providers (DSPs) to license the music they make available on their platforms, and ensure that the proper rightsholders were paid the mechanical royalties they are entitled to for streaming and download usage of their music on those platforms.

The MMA created a new blanket mechanical license that DSPs can secure to cover all of the music they make available on their platforms, and designated The MLC to be the exclusive administrator of that license beginning on January 1, 2021. Under the MMA, The MLC is also exclusively responsible for collecting the royalties (and accompanying data) from DSPs operating under the blanket license and distributing those royalties to the correct rightsholders on a monthly basis.

The MLC also built and maintains (1) The MLC Portal, where members of The MLC can register, maintain and update their musical works data, and (2) a comprehensive, publicly accessible database of musical works that it uses in the matching process for its royalty distributions and that any rightsholder can access for free using the Public Search that is accessible on The MLC’s homepage.

It has now been 14 months since the organization has been open for business, and we thought this would be a good time to speak with Kris Ahrend, CEO of The MLC. In this interview, he explains how The MLC was created, and the buildup to its launch last year. He also discusses the key points that songwriters & publishers should know about streaming royalties and how The MLC collects and distributes them.

DK: The MLC was established by the Music Modernization Act in 2018. Can you talk about the creation of The MLC, leading up to its launch a year ago?

Kris Ahrend: From the time that the Copyright Office designated that our Board of Directors would set up the organization, we had about 18 months to essentially build the company from scratch, and be ready to begin administering the new blanket license on January 1, 2021. I officially joined the company in January 2020 and I had about 12 months from that time to find and assemble a team, build all of our core systems and establish the public database of songs and song ownership information. And perhaps most importantly, we had to spread the word and explain to the industry what The MLC was going to be, what we do and why publishers, administrators and self-administered songwriters need to become members. We then had to try to enroll as many people as we could in advance of that launch. So we had an enormous amount to accomplish in a short period of time.

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What are the regulations and where can one find the full text of the rates and terms for Phono 4?

The CRB published a Final Rule in the U.S. Federal Register setting the blanket license mechanical royalty rates for permanent digital downloads.

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