Music Business

‘Where’s my money?’ songwriters, publishers ask MLC

Thanks to services claiming their safe harbor under the Music Modernization Act Title I giveaway, The Mechanical Licensing Collective recently came into $424,000,000, but has so far failed to disburse that money to songwriters and publishers.

Guest post by Chris Castle of Music Technology Policy

If anyone connected to The Mechanical Licensing Collective, Inc. quango brings up the $424,000,000 black box payment that the MLC received in February as part of services claiming their safe harbor under the Music Modernization Act Title I giveaway, it’s usually in the context of claiming credit for the payment as in “Aren’t we great, we got the services to pay $424,000,000 of black box money owed to songwriters.” (Followed shortly by so where’s my bonus?)

Notice what’s not mentioned in that sentence? True, some services paid some money to the MLC which was required by Title I in order for the major infringers like Spotify to enjoy yet another safe harbor. But the payment was not made to songwriters or publishers–it was made to the MLC quango, which is where it sits today, seven months later.

How could this be, you say? Very simple. Nobody made sure that the MLC was in a position to pay the money out before they took the money in. This is the kind of thing that you would make sure is tied down in the two-plus years the MLC was operational before they got the money. You know, like when did Noah build the Ark? Before the rain.

This is the kind of thing you might expect to be mentioned in the MLC’s annual report which was due June 30 but seems to have been delayed. What should have happened, of course, is that the Copyright Office in its supposed oversight role for the MLC quango should be closely reviewing MLC’s progress with paying out a half billion of other people’s money. This is what you would expect from a bit-in-the mouth hard-driving approach to oversight of hundreds of millions that Congress tasked to the Copyright Office.

Ask yourself (or maybe the Library of Congress Inspector General) whether you think that a pre-New Deal federal agency that has never had enforcement powers is culturally suited to the kind of rigorous prosecution that the oversight role requires? Having created the MLC self-licking ice cream cone, does anyone seriously think that the Copyright Office will rock the boat, particularly when the lawyers seem very interested in landing a job at Spotify (regulated by the Copyright Office) or the National Association of Broadcasters both of which have an ontologically hostile relationship with songwriters? Do you think anyone at the MLC is looking over their shoulder because they’re afraid of the Copyright Office? And if they don’t fear the oversight, what incentive do they have? Nobody else will be twisting their arms.

So should it come as a surprise to anyone that people are asking “where’s my money?” Or that no one is answering?

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  1. C’mon now, Chris, you know that these things take time to get right. MLC inherited a bunch of bad metadata from HFA, not to mention the indies who were never paid because they couldn’t sign up with HFA in the first place. If they started making payments before having the data to match appropriately, they would pay out black box $ to publishers who didn’t earn it.

    Should they have instead told the DSPs to hold the $ until they had all of the data collected so that they could pay out right away when the received it?

  2. MLC chose HFA, they did not “inherit” anything. Choosing HFA did not absolve them of responsibility for handling black box, although Title I comes close to creating a safe harbor in a safe harbor. But–Title I of MMA requires MLC to maintain a claiming portal for black box which they knew was an obligation because their lobbyists drafted the law.


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