The Mechanical Licensing Collective has received $424,38 million in unmatched historical royalties from digital service providers, along with data reports that show how these royalties were used.
Twenty digital service providers, including Apple Music, Amazon Music, GoogleGOOG 0.0%GOOG 0.0%, Pandora, and Spotify, each sent historical unmatched royalties to the Collective, which was named by the U.S. Register of Copyrights in July 2019 as part of the Music Modernization Act of 2018. As of January 2021, the MLC will be in charge of running the new blanket compulsory license for digital music services to use musical works.
Michelle Lewis, executive director of Songwriters of North America (SONA), says, “It’s a big day, and this is what we’ve all been waiting for.” She also says that the amount is “more than we were expecting.”
By a long shot, Apple Music and Spotify paid out the most royalties: $163.34 million and $153.23 million, respectively. They are followed by Amazon Music with $42.74 million, Google with $32.86 million, Pandora with $12.36 million, Soundcloud with $10.17 million, Tidal with $6.8 million, and iHeartRadio with $1.34 million.
“Songwriters and music publishers have been fighting for years to make sure that digital streaming services pay them correctly and in full. “Unmatched money” has been a problem for the industry, and now, thanks to the Music Modernization Act, we know that it adds up to just under $425 million. This does not include money that has already been paid out in multiple million-dollar settlements, says David Israelite, president, and CEO of the NMPA.
“This big number shows how broken the system was, how much the MMA was needed, and how much the protections it put in place have helped songwriters. At last, that money can go to the people who should have it. This is a huge win for both the people who make music and the streaming services. The Mechanical Licensing Collective getting this money, doing research to find its owners, and giving copyright owners a clear way to claim what is theirs is exciting progress that sets the stage for streaming to grow in the future, which will be good for the whole industry.
Here are the last few items on the MLC list: Deezer SA got $998,338, AudioMack got $490,124, LiveXLive got $400,000, Hoopla got $278,991, Qobuz got $106,893, GTL got $98,345, Wolfgang’s got $18,409, Mixcloud got $13,650, WeavRun got $12,711, FanLabel got $4,748, Karaoke Version got $2,087, and Pacemaker got $278.
“Today is an important step in the new mechanical licensing system set up by the Music Modernization Act two years ago,” says Garrett Levin, a representative for the Digital Licensee Coordinator.
“These royalties are a small part of all the mechanical royalties that have been paid out during that time period. The MLC now has all the usage data and royalties in one place. These are important parts of keeping the promise of the MMA and allowing the MLC to keep its promise to give royalties to those who have earned them in an efficient and effective way.
In addition to the money they were paid, the DSPs sent over 1,800 data files with more than 1.3 terabytes and 9 billion lines of data. The MLC is now looking over the data and figuring out how to find and pay the rightful copyright owners. No easy task.
Lewis says, “It’s a big job.” “The goal is to get that huge number as low as possible and match as much as we can. This will require work from the whole industry and a lot of work to teach songwriters and publishers how to use the public database and the claiming process.”
Kay Hanley, who is co-executive director of SONA, is in charge of the Unclaimed Royalties Oversight Committee of the MLC, which is in charge of giving out the money. The MLC plans to send out royalty payments and statements for the first time in April 2021.
The transfer of these funds is the result of months of work by the MLC and the participating DSPs to come up with and implement the requirements for these usage reports.
“Historical Unmatched Royalties,” a new page on the MLC’s website, will have more information about unmatched royalties from the past.
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