The MLC Receives $424 Million In Historical Unmatched Royalties From DSPs

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The Mechanical Licensing Collective (The MLC) announced today (Feb. 16) that it has received a total of $424,384,787 in accrued historical unmatched royalties from digital service providers (DSPs). The data is presented with corresponding reports that identify the usage related to these royalties.

A total of 20 DSPs separately transferred accrued historical unmatched royalties to The MLC as required in order for them to seek the MMA’s limitation on liability for past infringement. In addition to the accrued unmatched royalties transferred to The MLC, the DSPs concerned also delivered more than 1,800 data files, which contain in excess of 1.3 terabytes and nine billion lines of data.

The transfer of these monies represents the culmination of a months-long effort on the part of The MLC and these DSPs to develop and implement the specifications for these usage reports. With these historical unmatched royalties and usage reports now in hand, The MLC can begin the process of reviewing and analyzing the data in order to find and pay the proper copyright owners.

Going forward, The MLC will provide additional information about historical unmatched royalties on a newly-created page on its website entitled Historical Unmatched Royalties. Below is an initial summary of the historical unmatched royalties separately transferred to The MLC by each DSP:

Read more about the data above here.

NMPA President & CEO David Israelite offered the following about the news:

“Songwriters and music publishers have for years fought to ensure they were paid accurately and fully by digital streaming services. ‘Unmatched money’ has plagued the industry and today, thanks to the Music Modernization Act (MMA), we know that it amounts to just under $425 million—not including money previously paid out in multiple million dollar settlements. This significant amount proves just how broken the system was, how much the MMA was needed, and how much songwriters have to benefit from the protections it has put in place. At long last, that money can make its way to its rightful owners. This is a massive win for music creators and the streaming services themselves. The Mechanical Licensing Collective (MLC) obtaining this historically unmatched money, doing the research to find its owners, and giving copyright owners a transparent process to claim what is theirs is exciting progress that paves the way for the future growth of streaming that will benefit the entire industry.”

Digital Licensee Coordinator (DLC) representative Garrett Levin, offered the following statement:

“Today marks a critical milestone in the new mechanical licensing regime established by the Music Modernization Act (MMA) two years ago. As announced by The Mechanical Licensing Collective (The MLC), 20 digital music providers (DMPs) transferred a combined $424.4 million in historical unmatched royalties and accompanying historical usage information, representing the remaining royalties that have been unpaid to copyright owners after years of concerted effort by the streaming services and their partners. These royalties are a small fraction of the overall mechanical royalties that have been paid out during that time period.

The MLC now has in one centralized operation the usage data and corresponding royalties that are critical components for delivering on the promise of the MMA and allowing The MLC to meet its commitment to efficiently and effectively distribute royalties to those who have earned them.”

The Artist Rights Alliance gave the following statement:

“Today’s historic transfer of almost half a billion dollars in unmatched royalties to The MLC is a great start – but there’s a lot of work still to be done to get that money to the songwriters that earned it. We are grateful to the Copyright Office team that skillfully and doggedly worked through a number of complex issues in the months leading up this transfer, including major disagreements about the proper treatment of past industry settlements.

In the months ahead we look forward to engaging further with the Office about efforts by publishers who have already been paid for historical usages via settlement agreements to seek double payment out of these new funds. As we have told the Office in our prior filings, the major publishers that already settled with digital services and received payment from them should not be allowed to claim a further share of the monies transferred to The MLC today.

Today’s news is a huge step forward for songwriters – one made possible by so many stakeholders all across the music community who came together to work for passage of the Music Modernization Act and continue to work in good faith as it is implemented.”

LB Cantrell
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