The ins/outs and good/bad of the Mechanical Licensing Collective
One the largest and most impactful elements of the Music Modernization Act of 2019 was the creation of the Mechanical Licensing Collective. Now active since January first of this year, we look at the ins and outs of the MLC as well as some of its good and not so good implications for the music business.
Guest post by Stephen Carlisle of NOVA Southeastern University
In October of 2019, President Trump signed the “Music Modernization Act.” Back then, I wrote:
“The first section is the most complicated, and the most controversial. And right now, no one is sure it will work. The biggest is the establishment of a ‘Mechanical Licensing Collective,’ which will apply only to digital music providers, whether the delivery is by download or by streaming. The MLC is designed to:
- Offer and administer blanket licenses
- Collect and distribute royalties payable
- Create and maintain a “musical works database”
- Co-ordinate the identification of the owners of rights in a particular musical work or sound recording
- Process claims of ownership by authors and composers
- Collect the “administrative assessment” charge from the digital music providers
- Keep track of “non-blanket license” activity” 1
Now that it is 2021, choose your favorite idiom: the “time has come,” “the future is now,” “time for the rubber to hit the road,” and so on and so forth. The “Mechanical Licensing Collective” is here and it’s open for business, and has been operational as of January 1, 2021.
The first thing you have to know, if you are a music composer with regularly performed songs, is that the MMA stood hundreds of years of music licensing on its head. It used to be that in order to offer recordings of song, the company needed to get a license and it was the COMPANY’S responsibility to do so. The tech industry finds this requirement monumentally inconvenient. So, to achieve the crucially important tech milestone known as “scale,” the tech companies, particularly Spotify, simply offered the songs for delivery without a license, and of course, without paying. 2 The result was two well publicized class action lawsuits, which no doubt moved forward the Music Modernization Act to pass through Congress.
So, songwriters! The good news is you’re going to finally get paid!
The bad news? You’re going to have to do it yourself.
Nothing gets paid out by the MLC unless a proper registration has been made with it. And YOU, the composer, have got to make sure this is done, not the other way around. If you are already represented by a music publisher, don’t worry. They will take care of this for you. After all, they won’t get paid either if the songs are not registered.
If you are an independent, but licensed through the Harry Fox Agency, your data should also get moved over as well (but more on this later).
However, if you are self-administered, and unaffiliated, it’s completely on you to take the steps to register all of your songs with the MLC. If you don’t, you don’t get paid. The portal is found at https://themlc.com/.
Remember, this is mandatory. There is no “opt-out.”
The first step is to sign up as a member. There is no charge for this. The MLC will check you out to make the preliminary assessment that you really exist. After it accepts you, log in to the portal and start creating your catalog. At the outset, the MLC uses two factor identification. So, not only will you need a username and password, but an active email or cell phone number to which a one-time use ID code will be sent, each time you log on.
But the registration process has its problems, as we shall see. Yet, let me state at the beginning that the MLC is staffed with very bright and knowledgeable people who are pleasant and dedicated to assist you with any problems you might encounter. In sum, it’s like talking to a “cast member” at Disney World. And they actually answer their own phone. The number is (615) 488-3653. Don’t be shy about calling them. This is their job.
The minimum you will need to register is your name, and the song title. If there are complications, like you have a stage name that is different than your real name, e.g. the name that is on the copyright registration, you would be wise to include as much other information as possible, even though this is not required. Also, be aware that many songs have the same title, so again, include as much other information as possible. You’d be surprised how many songs called “I Love You” there are.
First and foremost, there is the song ID number, also called a “T” number. This can be found on the statements from your performing rights organization. There, you will also find your “IPI” number, which is your “publisher” number. If you can’t find your statements, or in particular, if you have songs that are not performed that often, you can also search the PRO database. The one for ASCAP is found here: https://www.ascap.com/repertory#/.
In addition, include the sound recording ID# for all the known recordings of your song. This is known as the ISRC. You can find this by searching the database at: https://isrc.soundexchange.com/#!/search.
If you have registered your song copyright, include that as well. Again, the copyright office has a searchable database at https://copyright.gov/.
But as with any organization that is so new, and undertaking such a massive data project, problems do crop up.
So, with apologies to “The Man From UNCLE,” here were the major problems:
The Imposter Affair
After getting word that I had been accepted as a member, I logged in to register the works of an internationally famous jazz composer that I have represented for 30+ years, around 55 songs total. The MLC site told me that the client was “already registered” as a member.
How is this possible? The client is dead, so he didn’t do it. This is my first time here, so how did this happen?
Because a music publishing company out of New York City had already claimed my client’s songs. Every single one of them. Claiming 100% administration rights.
This is when you pick up the phone and call the MLC. Their first response was to request a Letter of Direction, or “LOD.” But this type of letter is what is used when you’ve acquired a catalog and wish to advise of the change of ownership. What I really needed to do was to set up a dispute over ownership, something the MLC does not seem to have adequate mechanisms to initiate. In the end, I had to prepare a PDF of all the disputed songs, including song title, the “T” number from ASCAP and the MLC registration number, and send it to the MLC. This took some time.
To my relief, the NYC imposter publisher immediately relinquished the claim. But this meant I had to now go back into the MLC database and change all the publisher and administration information on 55 songs. This took some more time.
Apparently, this is not the first time that this has happened. I spoke with another songwriter who has a self-administered catalog, and the same thing happened to him. An imposter had claimed all of his songs. This was early enough in the game that the MLC told him to contact the imposter directly, which he did and the imposter backed off.
But beware, songwriters. If you haven’t registered your works, get on it. If it can happen to me, it can happen to you.
The Over-Claim Affair
Another problem cropped up when I tried to register my client’s share to a very popular song (a #1 rap hit) that had sampled one of his compositions. However, every time I tried to enter my client’s share of 27.5%, the MLC rejected it. “Total shares cannot exceed 100%,” it said. I knew the client’s share was correct. I had negotiated the share myself. What had happened was someone had over-claimed their share. Which one? I couldn’t tell. There are 5 writers and 8 publishers on this song. I had to subtract my client’s registered claim to less than half the actual amount, just to get the claim “in the door,” so to speak.
Again, there was no mechanism to set up a dispute on the web site, so I get back on the phone with the MLC. This results in another email to the MLC. This took a little longer, but eventually one party reduced their over-claim, allowing me to input the correct share for the client.
Changing this also proved problematic. I could not simply go in and “edit” the client’s share. Eventually, I had to delete the administrator, re-register the administrator to the song, and then add in the correct share. Even then, the change did not “take,” perhaps my error and perhaps the fault of a badly configured website. I had to do it twice. Several weeks later, it is now correct.
The “How Did This Get Here?” Affair
Then I had a different problem. There was a song in the client catalog that did not belong there. The song had been composed by someone else. This probably stems from bad data collected by the imposter publishers. But much to my surprise, there was no mechanism in the MLC portal to delete the song out of the client catalog. In a further conversation with the MLC administrators, they said they didn’t provide for this so as to avoid fatal mistakes by songwriters. I get this, but once again, this is a simple data problem that should have had a simpler solution.
This required, one more time, an email to the MLC. It took almost two months, but the song is now out of the catalog.
The “Why Is This Not Here?” Affair
Opposite of the problem just discussed, when I tried to register my client’s claim to a song, the MLC would not let me. It had already been claimed 100% by a major music publisher (one of the biggest in the world, in fact). Yet, I had a copyright registration number. And on the registration, my client is listed as an author. Since he was always self-published, I knew that the chances of him releasing his share was not realistic, because at some time in the last 30 years I would have come across that document.
This dispute remains unresolved. Claiming publisher has 30 days to respond. Then I get 30 days to respond back. Hopefully, the MLC is sequestering the accrued payments in the meantime.
The “Why Is This Not Here?” Affair, Part II
This one remains a mystery. Properly registered with the MLC, with all the information provided, including an exhaustive listing of 73 cover versions that have been made of the song. Still, the song has not been included in the client catalog. Followed up with MLC. As of this date, no resolution.
The “Why Is My Royalty Statement Blank?” Affair
I was very excited to get an email from the MLC saying that the first royalty statement was available. When I went to the portal, the statement was blank.
Blank? Back on the phone with the MLC.
Turns out I had missed the initial “spotlight” date of February 10th. Since the royalty statement only applied to songs registered as of that date, the statement was blank. Since I was tied up with the imposter publisher, I also missed the second “spotlight date” of March 10th. The MLC assures me that the statements will “look back” to previous monies paid once the songs are registered.
The Final Take
The final take is that the MLC seems to be trying hard. This is, indeed, a massive undertaking. Yet, as I noted at the top of the post, “no one is sure it will work.” Surely we will know more once a few royalty statements have been issued, especially for the $424 million in “unmatched” royalties the streaming services have now ponied up.
I will also note that there was strong push back from the MLC administration when I questioned the accuracy of the HFA database. To hear the MLC, the HFA does not input information, it merely records what is provided to it. Yet, this is the central issue being litigated by Eminem’s publisher in a suit against Spotify and the HFA, in which it is alleged that the HFA either falsified data, or turned a blind eye to data from Spotify that the HFA knew to be false, all in order to further Spotify’s fraud. 3 To wit:
“The plaintiffs allege that HFA engaged in ‘vicarious and contributory infringement … in connection with a scheme to conceal and materially enable Spotify’s copyright infringement,’ specifically, ‘by circulating knowingly fraudulent documents (e.g., untimely, and otherwise ineffective [NOIs] that were intentionally and knowingly backdated to appear as though they were issued on a timely basis, and the fraudulent rendering of purported ‘royalty’ statements)’ to the plaintiffs and to Kobalt Music Services America Inc. (‘Kobalt’), an entity that was authorized to collect royalties on the plaintiffs’ behalf. (Id. ¶ 2.) Those backdated NOIs, the plaintiffs claim, ‘purport[ed] to constitute valid and timely compulsory mechanical licenses,’ when, in fact, they did not. (Id. ¶ 4.) The backdated NOIs were, according to the plaintiffs, ‘designed to imply that they had been previously issued.’ (Id. ¶ 12.) Specifically, the backdated NOIs included ‘an ‘expected’ first date of distribution many years before the NOI’s were issued.’ (Id.) However, the plaintiffs believe, based on the information available to them, that ‘any NOI’s that were sent by HFA [regarding the Eight Mile Compositions] were, on information and belief, sent well after the Eight Mile Compositions began streaming on Spotify and were therefore never effective….’” 4
This goes along with what my friendly songwriter told me. Namely, that the HFA had attributed to him 100% ownership of songs he had co-writers on. “Who told them that?” he asked. “Certainly not me.”
So unless you inputted the data yourself, it would be prudent to get into the MLC database, and check to see that all of your song information is indeed correct, especially the shares.
Your future income depends on it.
- The Music Modernization Act: What’s In It, Why Is It In There, and Is It a Good Thing? ↩
- How Spotify Pays (or Doesn’t Pay) Songwriters ↩
- Eight Mile Style, LLC v. Spotify USA Inc. United States District Court, M.D. Tennessee, Nashville Division, Case No. 3:19-cv-0736 last reported decision at 2021 WL 1578106. ↩
- Id. ↩