Mechanical Licensing Collective

Mechanical Licensing Collective (MLC) Breaks New Ground: Auditing Streaming Services for Fair Music Licensing

Explore the groundbreaking move by the Mechanical Licensing Collective (MLC) as it undertakes the first-ever audits of streaming services. Uncover the implications for musicians, songwriters, and the music industry at large as the MLC strives for transparency and fairness in music licensing. Stay informed about the latest developments shaping the future of music streaming and artist compensation.

Mechanical Licensing Collective

The Mechanical Licensing Collective MLC Initiates Audits: Unveiling a New Chapter in Music Licensing Accountability

In a landmark move shaping the landscape of music licensing, the Mechanical Licensing Collective (MLC) has embarked on a significant undertaking, issuing notices of intent to audit all digital service providers (DSPs) operating under its compulsory blanket license since its establishment in 2021. This groundbreaking initiative spans a diverse spectrum of companies licensing music, ranging from major on-demand streaming platforms like Spotify, Apple Music, Amazon Music, Tidal, and Deezer to the interactive streaming facet of internet radio giants such as Pandora, Mixcloud, and iHeart Radio, along with various music apps like Ultimate Guitar, PianoTrax, and WeavRun.

The primary objective behind these audits is to meticulously verify the accuracy of reported and paid royalties, a crucial step in ensuring fair compensation for artists and songwriters. Join us on an exploration of this pivotal development, delving into the measures taken by the Mechanical Licensing Collective to enhance transparency and accountability in the dynamic realm of digital music streaming.

MLC Sets Precedent with Audits: Unveiling the Dynamics of a Transformative Music Industry Move. 

In a groundbreaking development, the Mechanical Licensing Collective (MLC) has set the wheels in motion by issuing notices of intent to audit digital service providers (DSPs) in the music industry, including industry giants like Spotify, Apple Music, Amazon Music, Tidal, and Deezer. This unprecedented move marks the first-ever audits under the U.S. compulsory mechanical license and represents the MLC’s commitment to upholding the accuracy of reported and paid royalties, mandated by the Music Modernization Act (MMA) of 2018.

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The MMA played a pivotal role in reshaping the licensing landscape for musical works, ushering in a blanket license system to replace the cumbersome song-by-song approach. This shift addressed longstanding challenges faced by both digital services and the music business, particularly in managing the significant pool of $427 million in unmatched and unpaid publishing royalties, often referred to as “blackbox” royalties.

The decision to conduct audits aligns with the MLC’s responsibility to distribute these royalties and administer the new blanket license. The scope of the audits extends beyond streaming services to encompass internet radio companies and music apps, demonstrating the MLC’s dedication to transparency and precision in royalty distribution.

Notably, the audits remain independent of external influences, such as Bridgeport Music’s recent decision to audit the MLC. To oversee this critical process, the Mechanical Licensing Collective has appointed Jane Bushmaker, a seasoned professional in music industry audits. External firms with extensive experience will conduct the audits, ensuring an impartial and thorough examination.

Mechanical Licensing Collective 2024

Jane Bushmaker will play a key role in overseeing the audits, bringing her expertise to bear on this transformative initiative. Alisa Coleman, the MLC’s board chair, emphasized the significance of the auditing right in safeguarding the interests of songwriters and music publishers.

Addressing financial implications, the Mechanical Licensing Collective assures its members that they will not bear any audit costs. These expenses will be covered by the MLC’s operational budget, funded by DSPs. The commitment extends to ensuring that any uncovered underpayments will be fully distributed to the affected rightsholders, without deductions for audit costs or fees. This comprehensive approach underscores the MLC’s dedication to fostering fairness and integrity within the music industry’s intricate web of licensing and royalties.


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