Multiple proposals were presented and the U.S. Copyright Office selected a plan
by the National Music Publishers Association (NMPA), the Nashville Songwriters Association International (NSAI), and the Songwriters of North America (SONA), which called for the creation of the Mechanical Licensing Collective (MLC). (Another proposal called the American Music Licensing Collective can be found here
for those interested.) The non-profit organization exists to collect money from streaming platforms and song information to make sure unidentified money generated from mechanical royalties can reach its proper rights holder. The MLC initially raised $62 million from the major streaming platforms
and according to a recent Billboard piece
quoting MLC CEO Kris Ahrend, they currently staff around seventy-five people.
After receiving streaming information and money, the MLC will then distribute that back out to the correct rights holders. However, in exchange for the creation of this new collection group, these technology firms were granted immunity. This eliminates the threat of Wixen-style lawsuits for this new, still fragile ecosystem. Another wrinkle in this agreement is that the MLC hired the Harry Fox Agency
, which threatened to sink the entire MMA
if the government tried to create its own database, even though Harry Fox’s troubles identifying songwriters for payments helped lead to this mess. Then we get to perhaps the most insidious part of the legislation: any
money that the MLC cannot match within three years is paid back on a market-share basis, which favors large rights holders.
If our lobbyists are going to celebrate anything, they need to celebrate when every penny is accounted for and paid to the right person. And there should be no cost-benefit analysis because as we were told many times, the services are paying for it. So they should pay for all of it, including the distribution to the long tail. In other words, our lobbyists should celebrate only if the market share distribution is zero.
The Music Modernization Act requires the MLC to spread awareness about this massive pot of money for songwriters to collect, but there are still some issues. Back in January, a small survey
(120 participants) by the group Artists Rights Watch found that while 63% of respondents had heard of the MLC, barely a tenth of those people were able to successfully register with the MLC. Despite broad awareness of the MLC, there appeared to be some significant issues with registering music for eventual payment.
This reported lack of success wasn’t unforeseeable. Many industry figures were rightfully worried from the project’s beginning. Right after the bill’s introduction, the Songwriters’ Guild of America and several others
highlighted numerous issues with the potential legislation
. The group’s concerns ranged from the disjointed nature of the proposal for average songwriters, to a critique that a market-share payout of unclaimed monies would benefit major publishers. The group also pointed out that the immunity from lawsuits leaves songwriters with little recourse should the system be abused by the backers.
David C. Lowery, from the bands Camper Van Beethoven and Cracker, spoke to Backer for his Baffler
piece and led an early lawsuit against Spotify
that helped kick off this whole endeavor. Lowery recently took to Twitter
to express his frustrations over not getting the correct publishing data for his works through the MLC via Harry Fox. Billboard just reported
on the initial payouts of MLC monies, which amounted to $24 million going to rights holders with another $16 million being held by the MLC because it’s currently unmatched to either a publisher or royalty holder. The Trichordist blog persuasively argued that the MLC’s success should based on how much money is returned to its rightful owner, not simply that unclaimed royalties were found. Luckily the bill contains a provision requiring that the MLC receive an audit every five years, so we’ll see a more totalizing account of the bill’s effectiveness. Still, that so much effort and corporate resources could produce such large gaps in payment shows an industry that despite press cheerleading, can still proceed with a better path to address these underlining issues.