In January 2021, The Mechanical Licensing Collective, also known as “The MLC,” began administering blanket mechanical licenses, in addition to collecting and distributing mechanical royalties, for songwriters and publishers in the U.S. The long-awaited and very anticipated launch of The MLC will positively impact songwriters, artists, composers, lyricists, and creators who now have a central entity that collects and distributes mechanical royalties received from blanket licenses granted to Digital Service Providers, or “DSPs”, such as Spotify, Amazon Music, Apple Music, and Tidal.
What Is The MLC and Why Was It Created?
The MLC, as a byproduct of the Music Modernization Act, which was enacted in 2018, is a non-profit organization of music publishing executives and songwriters. The MLC was created with one goal in mind: to simplify and create an equitable process for songwriters and creators to be compensated for their works in the digital streaming world. In accomplishing this goal, The MLC will issue and administer blanket mechanical licenses to DSPs, and will, in turn, collect mechanical royalties and timely distribute them to songwriters, publishers and other music rightsholders at no cost.
Mechanical royalties are just one set of royalties that songwriters or music rightsholders earn when their works are publicly reproduced in either physical or digital format. The U.S. Copyright Royalty Board determines the Mechanical Royalty Rate through “rate proceedings'' in which different industry leaders are encouraged to participate. To learn more about mechanical royalties and how payout rates are determined, check out this article.
How Is The MLC Different From Other Mechanical Licensing Administrators or Mechanical Rights Organizations (MROs)?
I know what you are thinking: how is this any different than other mechanical licensing administrative services or mechanical rights organizations (MRO) like the Harry Fox Agency (HFA) or Music Reports (MRI)? The answer is quite simple.
The MLC will be the only provider of blanket mechanical licensing to DSPs, but organizations like the Harry Fox Agency will still have the ability to grant individual mechanical licenses. A blanket license is a license issued by a collection society or pay source that allows a user to play or perform all compositions controlled by all publishers represented by that specific society. In some instances, these licenses cover music from several different artists. On the other hand, an individual mechanical license can be granted by a music rightsholder, mechanical rights organization, publisher, or administrator on a case-by-case basis.
What Does The MLC Mean for Me?
For independent songwriters, artists, composers, lyricists, creators, or general music rights holders, this means that by registering your works, for free, on The MLC Portal, you will receive mechanical royalties if and when The MLC includes your work in its blanket licenses. The payments will be made to you either directly or indirectly, on a monthly basis through your publisher or publishing administrator.
If you are a publisher, this means that you will need to register your client’s works on The MLC Portal to ensure that you receive your client’s royalties. If you’re a current Songtrust client, we’ve got you covered. We’ll automatically register your songs (past and future) with The MLC and collect your royalties on your behalf.
What Royalties Will The MLC Not Collect for Me?
The MLC will not issue licenses or receive and distribute royalties for synchronization of songs to platforms such as YouTube, TikTok, or Facebook, nor will The MLC issue licenses or collect royalties for public performance or physical-mechanical royalties. If you have made it to this point and still find yourself unsure of The MLC and how it works, do not worry - we have a solution!
Release your music through an independent distributor (CD Baby, Distrokid) to be placed on streaming platforms (Spotify, Apple Music, etc.) and digital download stores (iTunes). These distributors will also usually register and collect your master royalties on video platforms like YouTube.
Register your songs with a publishing administrator, such as Songtrust, to ensure you are collecting your publishing royalties from global performance and mechanical societies
Register your songs with SoundExchange for non-interactive digital radio royalties (e.g. Pandora)
Following these steps, whether you are an independent music creator, an experienced songwriter, or a publishing company, ensures you’re up-to-date on everything you need to take control of your career and collect your music royalties.