What is the Mechanical Licensing Collective?
The mechanical licensing collective (“MLC”) is a nonprofit entity that will administer the new blanket licensing system established by the Music Modernization Act (“MMA”) beginning on the “license availability date”—that is, January 1, 2021
The Mechanical Licensing Collective (MLC), created by U.S. music publishers and songwriters and designated by the U.S. Copyright Office to handle licensing and administering rights under the Music Modernization Act (MMA).
The MLC’s tasks, which are expected to begin imminently, will include the negotiation of a budget with the digital streaming services (who, by law, must fund the collective), partnering with a vendor to provide administration and matching services, and development of a user portal through which publishers and songwriters will be able to manage rights and royalties. The MLC plans to move quickly on all fronts in order to fully launch in January of 2021.
Mechanical Licensing Collective
Under Title I, the MMA authorizes the Register of Copyrights to designate the MLC. Beginning on January 1, 2021, the MLC will be primarily responsible for (i) offering and administering the blanket mechanical license; (ii) collecting and distributing royalties; (iii) identifying musical works and locating the copyright owners of such works; (iv) maintaining the musical works database, which contains information relating to musical works such as the identity of the copyright owners of such works and the sound recordings in which the musical works are embodied; and (v) administering processes by which copyright owners can claim ownership of musical works and by which royalties for unmatched works are equitably distributed to known copyright owners.
Of significance, the MLC will be tasked with distributing “black box” payments or royalty payments that have been unmatched to a songwriter. In connection with the distribution of such payments, the MLC will be required to publicize all unclaimed royalties and establish and administer a process for individual copyright owners to make ownership claims through a claiming portal. However, if the rightful copyright owners are not located within three years from when such royalties were received by the MLC, then the MLC will distribute the unclaimed sum amongst existing copyright owners identified in the MLC’s records by market share.
Two groups competed for the position of MLC and submitted a bid to the Register of Copyrights. The newly appointed MLC will now begin working on preparations for its 2021 administration by negotiating a budget with digital streaming services, which shall provide funding for the MLC, creating the musical works database, and constructing the unclaimed royalties claiming portal.