In January, it was announced that Kris Ahrend had joined as CEO of the Mechanical Licensing Collective (MLC), which was formed following the passage of the Music Modernization Act in 2018. In 2019, the Register of Copyrights designated the MLC as the non-profit organization responsible for administering blanket mechanical licenses to digital services such as Amazon Music, Apple, Spotify and Tidal, and for distributing those royalties to publishers and self-administered songwriters.
The Nashville-based MLC recently announced a slate of executive hirings to help Ahrend lead the organization, which currently includes 20 employees, with plans to ultimately form a team of nearly 100 employees.
“The MLC represents one of those changes that transforms the music business, once every generation or two,” Ahrend says. “You have to go back to the passage of the Digital Millennium Copyright Act to see the last kind of moment where our industry changed. Sound Exchange later came into being as an organization that helped to really transform an aspect of the business. The MLC will be similarly transformative. I’m very privileged to be asked to lead an organization that is going to have the potential to drive that transformation for our industry and the next chance to do that might not come for another 15 or 20 years. I didn’t want to miss the chance to be part of that change.
“Every songwriter in the country and many songwriters around the world will ultimately be getting paid a portion of their revenue from an organization based in Nashville,” he says.
In November 2019, the MLC and the Digital Licensing Coordinator reached a funding deal, in which the MLC receives $33.5 million in startup costs and an initial annual assessment for 2021 of $28.5 million, with costs divided between the licensees. Beginning Jan. 1, 2021, the MLC will begin to issue and administer the blanket licenses. The collective has teamed with mechanical licensing administrator Harry Fox Agency, building upon the HFA’s database of musical works data to streamline the process of matching writer and publisher information with corresponding sound recording data to make sure songwriters and publishers are paid the full amount they are due. Songwriters can also receive unclaimed funds from the various DSPs. In order to collect royalties collected from DSPs by the MLC, music publishers and self-administered songwriters, composers and lyricists will need to register with the MLC in order to access their data via the MLC Portal.
Ahrend launched his career as a law clerk for the Western District of the Virginia District Court and the Second Circuit Court of Appeals, before joining the Intellectual Property & Litigation Group of Simpson Thacher & Bartlett LLP in New York. He entered the music industry working for Sony Music’s law department, and later in the business and legal affairs department at Sony BMG Music Entertainment, before joining Rhino Entertainment as Sr. VP, Business & Legal Affairs. In 2013, he joined Warner Music Group as Sr. VP, Recorded Music Rights Administration. In 2016, he was promoted to President of U.S. Shared Services and led the development and launch of Warner Music’s Center of Excellence for Shared Services in Nashville, coordinating operations for 15 functional teams for Warner Music’s United States-based publishing teams, labels and corporate divisions.
Ahrend spoke with MusicRow about the work the MLC is doing and what basing the organization in Nashville means for Music City.
MusicRow: The MLC is set to begin administering blanket mechanical license agreements, and the collection of royalties for independent writers and publishers, on January 1, 2021. Has the COVID-19 pandemic affected that timeline in any way?
Ahrend: It has changed the way we have done lots of things. But from the timing perspective, we are still on track to be ready for that January 2021 license availability date. We have not contemplated in any way seeking to change or push that back. We will be ready. We’ve made extraordinary progress in a short period of time, under circumstances that, by any definition, are not normal.
MR: In what ways have your previous roles at Sony, Rhino, and Warner prepared you to lead the MLC?
Ahrend: Every step of my career helped prepare me for the role that I now have at the MLC, in ways that I never could’ve imagined. Because up until a couple years ago the MLC wasn’t even an idea. My early career as a lawyer helped me understand the legal foundations of our business. We are in essence a copyright industry, and whether it’s on the publishing side, or on the sound recording side, everything we do is underpinned by that foundation of copyright. At Sony, I did publishing deals, new tech deals, considered trademark issues, record deals—the full panoply of legal issues that we face in our industry and got a good grounding in those.
At Rhino, the catalog business is all about understanding the economics of the deal. If you release a hits album or a box set, how much are you spending to create that product, and will it be profitable? So, that gave me a good understanding of the business process. Rhino helped me better understand the connection between what we as companies do, and the creators with whom we do that. The music business, regardless of what part you’re in, can be boiled down to companies making two promises to creators: The first is they will help to cultivate their creativity, and that’s the piece that gets the most attention. But the second is that we will pay those creators for their creative output under the terms of the deals we do with them. At Rhino, I saw first-hand the impact that we had on creators, when we do that well or not so well, and it’s ultimately something that enables those writers to continue to write. I got to deal with so many artists that had relationships with Warner over the years through our catalog, from Aretha Franklin to Led Zeppelin, and hundreds in between, and when you speak with artists you really appreciate how important that second promise is to them, and to their livelihoods.
MR: What attracted you to this role at the MLC?
Ahrend: The ability to work at a company where the sole mission is aligned with what I do was incredibly compelling. When you work in the industry, there is often an inherent tension between those two promises because in any company where resources are limited—as they always are—the company has to make choices. Do you invest in A&R or do you invest in a new royalty system? At MLC, our sole focus is on making sure that songwriters are paid. At Warner Music, I was able to envision what an organization will look like, to hire a team of people that deliver on the objectives that you’ve set out and, and to see how that can have an impact on the lives of creators. That experience of building something was incredibly compelling to me. I jumped at the chance to be able to do that again with the MLC.
MR: You are working with Harry Fox Agency, and building upon the database they have already established. How will that process work?
Ahrend: We are working closely with them in every facet of our operation. Data is something that can always be improved; data is rarely static. We are not only assembling a database of musical works and sound recordings that exist today and associating those works with the recordings, but also capturing data for all the new musical works that are being written and sound recordings being made, so there is a constant stream of data. The partnership with HFA helps us get to those starting lines of a race that never ends.
The MLC is unique in that our board that governs us consists entirely of people who represent the stakeholders we will serve. We are essentially an organization that is managed by songwriters for the benefit of songwriters, and managed by publishers for the benefit of publishers. It’s really important now for songwriters and publishers to understand that our success depends in part on each of them playing their part—looking at their own data and helping to make sure it is as accurate as it can be. We will ultimately be a small organization; it would be impossible for any organization of around 100 people to take on the task of managing that level of data. But if everyone is engaged, we will be far more successful.
MR: The onus is on the writers and publishers to make sure the information they send to the MLC is correct. How is the MLC Portal optimized for their use—particularly smaller or more independent writers and publishers?
Ahrend: We are looking at launching the portal in the third quarter of the year. That will give us all time to look at the data and work to improve it.
We want to get to the place where we can roll out the portal, and get people to register with the portal so they can set up in our system. In many ways the portal is designed to help the smallest publishers and those individual stakeholders, those individual songwriters to manage their data. We expect they will be the ones to interact most regularly with the portal, whereas with our larger publisher company partners, it will involve more interactions at a system level.
MR: The MLC has a training/educational program set up for new hires. Can you talk about the purpose of that program and how it is integrated into the work of the MLC?
Ahrend: For those new team member roles, we wanted to be really intentional in how we bring them into the organization. Everyone that we hire will participate in a training program that will last several weeks, which will give them a broad-based education in the fundamentals of the industry that will be relevant to the roles we will ask them to fill, so they are better prepared to start doing that work.
We also think that makes the MLC an appealing option for them. We are looking to hire the best and the brightest, but to do that we have to do our part by offering them a compelling experience from the beginning. Offering this level of training will be compelling for people who are looking not only for a job, but for an experience that gives them opportunities to grow and put them on a career path.
MR: What does it mean to you for the Mechanical Licensing Collective to be based in Nashville?
Ahrend: What’s so wonderful for Nashville is that it’s unquestioned that Nashville has been a hub for music for decades. In recent years, we’ve broadened to include far more than just the creative aspects of the business. The MLC is as much a technology and a data company as we are a music company, so for us to be able to play a big role in helping Nashville take that next step forward in this evolution to be the broadest possible version of a Music City we can be, is really exciting and really meaningful.
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