Here Are 10 Ways That The Music Licensing Collective (MLC) Can Set The Bar As A Collective Licensing Organization In The 21st Century

music licensing collective dae bogan

If you work in the music industry and own a radio, TV, smartphone, or computer then you’ve probably already heard that the The Orrin G. Hatch–Bob Goodlatte Music Modernization Act (MMA) has been signed into law. At this point, every major music rights organization has published their praise of the legislation, which will create a blanket streaming mechanical license for Spotify, Apple, Amazon, Google, Tidal, and other on-demand music streaming companies; bring pre-1972 sound recordings under federal copyright protection and open up a flow of royalties from digital services to the artists (or their estates) and copyright owners of those recordings; and codify an allocation of digital radio royalties to music producers.

Title 1 of the MMA, also called Music Modernization Act, sets out provisions and guidance for the formation of a collective mechanical licensing body to be called the Mechanical Licensing Collective (MLC). The MLC will administer a safe harbor blanket license for the streaming of musical works, collect licensee fees from licensees, prepare and remit statements of earnings to songwriters and music publishers, and make royalty payments to the same.

The MLC will join the ranks of SoundExchange, ASCAP, BMI, and SESAC in the sense that it will become a powerful representative of the collective rights of thousands of music creators and rights-holders in the United States. However, unlike its counterparts, the MLC will be born in the 21st century. And as a 21st century collective licensing organization, the MLC has the unique opportunity to implement, at inception, 21st century business practices utilizing 21st century best practices and technologies.

Here are 10 ways that the Mechanical Licensing Collective can set the bar as a 21st century collective licensing organization:

1.) Provide its members with a data BI (business intelligence) dashboard to better visualize their mechanical royalties data and dive deeper into their statements. The dashboard could enable forecasting based on projected streaming activity (maybe offer scenario planning, which makes it possible to attract loans against future royalties). They could ingest data from a service like BuzzAngle to offer estimated royalty accrual in real-time so that members who are artists can see the net effect of playlist streaming campaigns on their bottom line and choose to invest more into campaigns in virtual real-time.

2.) Maintain a public and accessible unclaimed royalties database. Deploy artificial intelligence to evaluate unmatched usage reports as opposed to relying solely on exact name and ISWC matches. And expand the statute of limitations on unclaimed royalties to 10 years

3.) Require DSPs who take advantage of the safe harbor streaming mechanical license to recommend (and provide guidance) to aggregators and labels to provide composition ownership information in their metadata when uploading releases to the DSP. This can be done with custom parameters in DDEX ERN or via the new DDEX MWN (Musical Works Ownership) message schema.

4.) Work with the U.S. Copyright Office to create an integrated musical works registrations process so that works are simultaneously registered with the MLC and LOC.

5.) Expand the statute of limitation period on unclaimed royalties to 10 years and hold funds in an interest-bearing escrow account from which 25% of the interest flows to the general fund of the MLC and 75% of the interest is paid to the payee, along with the balance of unpaid royalties, once the payee has come forward or have been found.

6.) Commission an annual audit and publish the findings to members.

7.) Use blockchain, where applicable.

8.) Remit statements and payments monthly when a member opts to receive direct deposits and electronic statements.

9.) Display assessed administration fees on royalty statements.

10.) Do not implement high usage weights or bonuses.

Tags: mlc, mma, music licensing collective, music modernization act

About Dae Bogan

Dae Bogan is a music rights executive, serial entrepreneur, and educator with over fifteen years of experience in the music industry. Currently, he is the Head of Third-Party Partnerships at the Mechanical Licensing Collective and Lecturer at the UCLA Herb Alpert School of Music.

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