Axios: Major Leap for Streaming Royalties

Major leap for streaming royalties

The Nashville-based Mechanical Licensing Collective (MLC) is on track to distribute more than $400 million in royalties to songwriters and publishers since its launch, according to its top executive.

Why it matters: The nonprofit MLC's job is to match royalties from on-demand streaming services with the correct copyright owner. It was created by the landmark Music Modernization Act, which President Trump signed into law in 2018.

Driving the news: Streaming services like Spotify and Apple Music were previously on the hook to license songs. But, failures to pay the correct songwriter led to expensive lawsuits.

As a compromise, streaming companies agreed to fund the creation of the MLC and support the Music Modernization Act. In exchange, they ceased to be legally liable for such lawsuits.
Songwriter advocacy groups, including the Nashville Songwriters Association International, also backed the bill.

Between the lines: Because streaming revenue is now fundamental to the music economy, industry stakeholders have closely watched the MLC's success in paying out royalties.

According to its annual report, the MLC has achieved a match rate of more than 87% by using a newly created database and sophisticated software.
The MLC is headquartered in Nashville and employs about 80 people. Its membership boasts more than 17,000 copyright holders.

What he's saying: Kris Ahrend, CEO for the MLC, says he's proud "there's been no gap" in making regularly scheduled monthly payments to copyright owners.

A major challenge facing the MLC is identifying the correct copyright owners entitled to another approximately $424 million in unmatched royalties that accumulated before the organization was launched.

What's next: Ahrend tells Axios the MLC will successfully pay out those royalties by continuing to get the word out about the organization, signing up members and building out its database.

"More members and more data will give us a much greater chance at succeeding in making the connections and paying people that money."

Editor's note: This story has corrected the name of the organization on track to distribute more than $400 million in royalties to the Mechanical Licensing Collective, not the Music Licensing Collective.

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