The Mechanical Licensing Collective (The MLC) has issued notices of intent to conduct audits of Digital Service Providers (DSPs) that started operating under the compulsory blanket license administered by The MLC in 2021.
This audit will review usages under the blanket license that occurred between January 1, 2021 and December 31, 2023, the first three years of The MLC’s full operations.
By sending audit notices to both the DSPs and the United States Copyright Office, The MLC is exercising a key right granted by Congress in the Music Modernization Act (MMA). This right enables The MLC to conduct audits of DSPs operating under the blanket license to ensure the DSPs have accurately reported and paid royalties.
Members of The MLC will not bear any of the audit costs; these will be covered by The MLC’s operational budget, which is funded by DSPs at no cost to songwriters or music publishers under the MMA. Should an audit reveal an underpayment of any amount, The MLC will distribute the full amount of any recovery to the impacted rightsholders, without deducting any audit costs or fees.
“Ensuring DSPs have reported royalties accurately is one of The MLC’s statutory responsibilities under the MMA,” says Kris Ahrend, Chief Executive Officer of The MLC. “The MLC has tapped music industry audit veteran, Jane Bushmaker, a member of The MLC’s Analytics & Automation team, to oversee DSP audits, which will be conducted by experienced outside audit firms,” he continues.
Alisa Coleman, Chair of the Board of Directors of The MLC says, “The MLC’s audit right is a first in the 115-year history of the U.S. compulsory mechanical license and provides enhanced protection for songwriters and music publishers. The audit notices filed by The MLC mark the beginning of its fulfillment of this important function.”
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