The MLC's first distribution of royalties reached $24m

By Emmanuel Legrand

The Mechanical Licensing Collective (The MLC) has completed its first-ever monthly distribution of mechanical royalties for the amount of $24 million.

  The royalties were related to the use of musical works by US digital service providers (DSPs) during January 2021. The distribution did not include any historical unmatched royalties, for which The MLC received at the start of the year $424 million from DSPs.

  The MLC was created by the Music Modernisation Act of 2018 (MMA) to license, collect and distribute mechanical rights for the online use of music. It started operating on January 1, 2021.

Matching 80% of the royalties

  The royalty pool for all usage data reported to The MLC totaled more than $53m when calculated at the applicable statutory rates. The MLC said it had been able to match "approximately 80 percent of the royalties reported to musical works registered in its public database," claiming the figure was "in line with industry benchmarks for initial matching results."

   Once the matching work was completed, The MLC established which uses were covered by voluntary licenses between the DSPs and copyright owners – described as "a substantial portion in this case" –, which needed to be carved out of each DSP’s blanket license.

  After carving out the matched uses covered by voluntary licenses, The MLC determined that the remaining amount of mechanical royalties owed by DSPs to the MLC totalled more than $40m. Of these, $24m in matched royalties was paid by The MLC to its Members and $16.4m is currently pending distribution ($4.9m in matched royalties related to shares of registered works for which claims have yet to be submitted by a rightsholder/MLC Member; $500,000 in matched royalties on legal hold; and $11m related to usage that The MLC has not yet been able to match to the musical works in its public database).

Fulfill an important mission

  "All of the royalties currently pending distribution will accrue interest until they are distributed, as required by the MMA," said The MLC, adding that it will continue to attempt reducing the amount of royalties that are currently pending distribution.

  “The completion of The MLC’s first monthly processing of royalties and the payment of more than $24 million in royalties directly to rights holders represents another step toward realising the promise of the Music Modernisation Act,” said Alisa Coleman, Chair of The MLC’s Board of Directors.

  The MLC CEO Kris Ahrend added: “Thanks to the hard work and diligence of our team, and the cooperation and support of our many partners, we have now begun fulfilling our important mission of ensuring that rights holders receive their proper share of the blanket mechanical royalties paid by DSPs.”