New License For U.S. Digital Audio Mechanicals Available January 1st

The new blanket mechanical license covering the use of musical works in the U.S. by eligible digital audio services established by The Music Modernization Act of 2018 will be available beginning January 1, 2021. The arrival of this new licensing system will mark the beginning of a new era of greater efficiency and transparency in mechanical licensing for musical works in the U.S.

For most digital service providers operating digital audio services in the U.S. that offer interactive streaming or digital downloads to consumers, the MMA imposes several new obligations that they will be required by law to fulfill. Some require immediate action, while others must be completed no later than February 15, 2021. The MMA created two new organizations to help DSPs fulfill their new responsibilities: The Mechanical Licensing Collective, which is responsible for administering this new blanket license, and the Digital Licensee Coordinator, which is responsible for representing the digital audio services that will be operating under the new blanket license.

The new blanket license offers a host of benefits to DSPs that opt to secure it, including helping to make the administration and payment of mechanical royalties much easier and more effective and providing services with a way to ensure that they are properly licensed to use all of the musical works that they make available on their services. DSPs that secure the blanket will also avoid the costly liability that would arise from using works that were not properly licensed. Finally, even if a service elected not to secure the blanket despite its many benefits, the MMA still imposes a number of reporting obligations on all but the smallest of those services. For this reason, The MLC and DLC hope that any service eligible to operate under the new blanket license will choose to do so.

“The MLC has engaged with more than 50 DSPs so far, both to make sure they aware of their new legal responsibilities and to preview the resources we’ve created for them, including reporting specifications and the templates for notices to The MLC,” said Kris Ahrend, CEO of The MLC. “These resources are all on The MLC’s website, and our DSP Relations Team is available to answer any questions about them that DSPs might have. All of this should ensure that currently-operating DSPs are in a position to begin operating under the new blanket license starting on January 1, 2021.”