The MLC picks HFA and ConsenSys as vendors to manage digital uses of music

By Emmanuel Legrand

 

The Mechanical Licensing Collective (MLC), created by the Music Modernisation Act (MMA) to license and administer mechanical rights, has picked technology company ConsenSys and mechanical licensing administrator Harry Fox Agency (HFA), as "the primary vendors responsible for managing the matching of digital uses to musical works, distributing mechanical royalties, and on-boarding songwriters, composers, lyricists, and music publishers and their catalogs to the database."

  HFA is owned by for profit rights society SESAC, part of investment group Blackstone, and ConsenSys is a blockchain software technology company founded by Joseph Lubin in 2014. The choice of vendors "received unanimous approval from the MLC Board." The MLC is due to launch on January 1, 2021.

 

  In addition, MLC announced the appointment of former Digital Data Exchange (DDEX) Chair and former Kobalt executive Richard Thompson as Chief Information Officer responsible "for overseeing the development and launch of the MLC’s revolutionary data platform to distribute royalties payable to songwriters and copyright owners."

 

  "Richard’s impressive experience in building the technology behind Kobalt, as well as his past role as chair of DDEX and his participation in the international music metadata standards group for nearly a decade, make him the ideal person to drive the development of the MLC’s platform," said MLC Board Chair Alisa Coleman.

 

Extensive vetting

 

  In a statement, the MLC said that over a dozen technology companies participated in the intensive Request for Information and Request for Proposal (RFI/RFP) evaluation process that began in November 2018. "Those companies were asked to provide comprehensive information regarding their US business, user platforms, matching, administration and royalty distribution processes, and technological capabilities in response to the RFI and then, for a narrowed group of vendors, to the RFP," said the MLC, adding: "The MLC conducted many hours of meetings with each vendor finalist and required those companies to engage in extensive data matching testing before making final partner decisions."  

 

  Thompson said, “The MLC needs a proven, end-to-end licensing, matching, and royalty processing system that can go live on January 1, 2021. After completing a rigorous evaluation process, HFA in collaboration with ConsenSys is the clear choice to ensure that the MLC has a solid platform to deliver on its mission. These vendors will successfully help the MLC deliver not only what is required under the MMA, but also improve the overall mechanical licensing process in the United States.”   

 

Same as the old boss?

 
  However, the choice of HFA to administer uses of music works raised a few eyebrows in the music community. US songwriter, performer and activist David Lowery quipped on Twitter: "Talk about burying the lede. HFA IS THE DIGITAL SERVICE PROVIDER TO THE “NEW” FEDERAL MUSIC LICENSING COLLECTIVE. Meet the new boss, same as the old boss."

  Lowery initiated a class action suit against Spotify for using his compositions without paying mechanical royalties (the suit was later settled in 2017). In a blogpost, Lowery wrote: "The problem is that HFA was the 3rd party licensing contractor hired by Spotify and other streaming services to obtain licenses from songwriters and publishers. HFA did not properly do their job leaving streaming services exposed to massive copyright infringement lawsuits (from people like me)."

  An MLC representative familiar with the decision-making process that led to the choice of HFA and ConsenSys as vendors told Creative Industries Newsletter that the MLC has spent "spent thousands of hours" reviewing submissions and conducted a "rigorous, fair evaluation process" to select the qualified vendors that will partner with it, and that includes HFA.

 

Technical expertise

 
  The source added that one of the key points in the evaluation was to ensure that the vendors would "competently intake large amounts of data, implement an accurate and efficient matching process, strengthen existing technology, and meet the requirements mandated under the law."

 
  "Given the tight time-frame for implementation, the board need to consider existing players in the marketplace who had the technical expertise to scale quickly," said the source. "HFA is only part of the solution; there will be many vendors that will contribute to the database development process. HFA has partnered with ConsenSys on the scope of work they will undertake, and more vendors will be announced to support our work in the coming weeks."