Sunday, May 17, 2020

Kris Ahrend (The MLC): "We will be ready to deliver on January 1, 2021."

Kris Ahrend, CEO The MLC, has the unique task to set up and launch the first new collective management organisation created by law in the United States since SoundExchange in the early 2000s.


 The MLC, or Mechanical Licensing Collective was created by the 2018 Orrin Hatch-Bob Goodlatte Music Modernisation Act (MMA), as a means to solve once for all the issue of mechanical licensing for online usage of music repertoire in the US.  

  The MMA provides a blanket license to digital services in exchange for a one-stop-shop for mechanical licensing. The non-profit MLC will administer and collect the proceeds from mechanical rights on behalf of songwriters, composers, and music publishers. It is meant to put put an end to the discombobulated system that dominated the end of the last century, when law was no longer adapted to deal with the specificities of online licensing.  

  Ahrend was appointed mid-January by the board of The MLC, chaired by Alisa Coleman from ABCKO. Ahrend joined from Warner Music Group, where he was President of US Shared Services, a division he helped create. A lawyer by training, he began his career in the music industry working in the Law Department at Sony Music, and then in the business and legal affairs department at Sony BMG Music Entertainment before taking a senior executive role at WMG's Rhino Entertainment.  

  At the heart of The MLC will be a central database that should incorporate all the known compositions in the United States and abroad. To help with the task of setting up the database, The MLC will rely on SESAC's Harry Fox Agency, which has been picked one of the key support companies for The MLC, and which used to administer mechanical licenses. Start-up costs are picked by DSPs as will the yearly operational costs after the launch.

  Ahrend recently announced that The MLC's core operations would be based in Nashville, where he lives, at a location yet to be determined.

  In an Q&A with Emmanuel Legrand, Ahrend talked about the tasks already accomplished and the challenges ahead, as The MLC prepares for its official launch on January 1, 2021.    

Has the coronavirus crisis affected your schedule and will you be able to meet the January 1, 2021 deadline? 

Kris Ahrend: 
We are still on track and we are 100% committed to hitting it. The pandemic has created some interesting issues, and you can appreciate how challenging it can be for big establishments having to deal with the logistical challenges of people working from home. But we are very much a start-up with some 19 people today, up from two, in January so it was not too difficult to manage the transition. From the outset we were in the cloud and The MLC board have all been virtual because our board members all around the country. It did not have the greatest impact in terms of operations for us. We got people on the team that no one has ever met in person and rather than have it in person, we did the hiring interviews online. Much of what we do now is planning and development.  

How far are you into building the infrastructure? 

Obviously, our key project is the user portal that will allow publishers and self-administered songwriters to access data that we will be compiling. We have been on it for many months, so we did not experience any meaningful delay. Of course there's always hiccups along the road in with projects like that, but none significant.  

The name of the organisation is The MLC, with capital T, why is that?

Our name is "the mechanical licensing collective" and to name it The MLC was intended in part to make a distinction between the mechanical licensing collective as a generic name and the creation of a collective. We adopted a name close to the generic and it will be more recognisable. The MLC is more catchy.  

Why the choice of Nashville for your headquarters? Because you already live there? 

It was not about me (laughs)! Nashville is obviously a hub for publishers and songwriters and it is located between NY and LA so it has great advantages in terms of time zones. A a lot of members of the board thought it was the right place, and have a physical presence where can invite people in our office and do outreach, education and customer service. More broadly, The MLC will be everywhere and will reach out to songwriters wherever they are. Since day one, we were talking about the diversity that we serve. There are songwriters located in every state in the country, and writers around the world that will have songs in US and we will collect for them too. We need to collect with them, wherever they are. We will have team members in other places. I don't want to be limited to Nashville.  

Will it also help that HFA's parent company SESAC is also based in Nashville? 

HFA is affiliated with SESAC and have reach and technology here. But the folks we deal with are in New York. The choice for Nashville was more driven by the fact that there is an important and increasingly growing songwriting and publishing community. There's also lower costs and better living standards here. For all these reasons, Nashville offers a lot of advantages.  

How's your database progressing?  

The portal is the big piece of development work. We are creating the interface for people to register with us and have access to the data. That's the challenge. It is well under way and going well.  

Will The MLC come to life on January 1?  

In the next quarter and in the third quarter we will begin to launch our customer experience team and interact with stakeholders and roll out the portal for people to enter data and clean up data. We want publishers and self-administered publishers to look at the data and the quality of data. All of that will be happening before we start, and January is when we start administering the blanket license.  

Have you already licensed digital platforms?  

No, we cannot do it before January. I have been in contact with all the DSPs individually and through the digital licensee coordinator [DLC – the entity created by the MMA to represent the DSPs]. We have decisions to make regarding the interfaces to bring usage files in our systems and processes.  

Have you been reaching out to other mechanical societies in the world? And will you be able to ensure that rights holders of “US works” and “non-US works” will be equally treated?

There's a couple of things to unpack. It is on our radar and we are aware that international societies is a group of stakeholders we have to interact with. The portal will be the same for everybody. It is also important to know that we don't have the ability to do anything outside of the US. We need to access societies whose songs are used in the US but we cannot have reciprocal agreements. Instead it is about connecting to our systems.

What are the biggest challenges you are facing? 

Like everyone on the outside, I was most curious about the technology aspect and I am relieved that the development process is well underway and [The MLC’s Chief Information Officer, hired in November 2019, joining from KobaltRichard Thompson is an icon of the industry and one of the top people making a living in that area. I would not call this a surprise and I have built an organisation for Warner Music and there are lots of foundational things to look after when you set up a company from how do you pay people, to getting basic things in place. I spent the first three months mostly focusing on these issues. I knew we had to do it. The MLC is like no other start-up with regards to that. Our employees started in February and it gave me a week or two to get my feet on the ground. That's been a big part of the story. We have to have all that in place and we want to make sure people are aligned in order to make sure we can deliver when we are fully operational.

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