What New Mechanical Licensing Collective Means For Indie Songwriters

The MLC – or Mechanical Licensing Collective – is a new U.S.-based organization tasked with administering mechanical licenses for digital audio. So what does this mean for songwriters and their royalties, and do they still need have traditional publishers?

By Greg Majewski from the CD Baby DIY Musician Blog

What the new Mechanical Licensing Collective means for songwriters

In official music biz terms, the MLC is a new U.S.-based Mechanical Rights Organization (MRO) designated by the U.S. Copyright Office to issue and administer the digital audio mechanical blanket license in accordance with the Music Modernization Act to DSPs in the United States.

What this means for you, the independent artist, is that the MLC was created to help songwriters in the U.S. collect mechanical royalties generated from streaming. Since these royalties can be difficult to collect on your own, the MLC is in fact a very good thing.

What kinds of royalties does the MLC collect?

The MLC will now be the MRO responsible for collecting mechanical royalties from streaming platforms in the U.S. This distinction is important, because the MLC does not collect international royalties. It will only collect royalties generated from streams in the U.S.

How are mechanical streaming royalties generated?

Mechanical royalties get their name from the mechanical recreation of a composition. This dates back to physical media like vinyl and CDs, when songwriters and publishers were owed royalties when compositions they owned were pressed onto media formats.

Nowadays in the digital age of downloading and streaming, mechanical royalties are generated whenever a composition is mechanically recreated via either a download purchase or interactive stream. So whenever someone buys a song from a download store like iTunes or presses “play” on an on-demand streaming platform like Spotify or Apple Music, that will generate a mechanical royalty payable to the composition’s copyright holders (songwriters and publishers).

How do copyright holders get paid from the MLC?

The owners of composition copyrights must “Connect to Collect” (TM) with the MLC. This means any music publishers and self-administered songwriters (songwriters who retain the right to collect their own mechanical royalties) who wish to collect royalties from the MLC must become a member by registering with them.

Do I need to register with the MLC?

Not if you’re using CD Baby Pro Publishing! Since the MLC is working with the Harry Fox Agency (HFA) to build a database of works, all CD Baby Pro members will have their songs transferred from HFA to the MLC’s database with all the ownership information. And since CD Baby Pro is a publishing administration service, it’s already registered with the MLC to collect royalties, just as with other royalty collection agencies like HFA.

What’s really cool about the MLC’s database is that it will be publicly accessible. This not only makes it easy for songwriters or other individuals to make sure the ownership information for a song is correct, but it also increases transparency as far as who owns what as more platforms like Spotify are making such metadata public.

What else does the MLC do?

The MLC will provide blanket licenses for streaming services. It provides a baseline structure to ensure that royalties are actually collected and distributed to rights holders. The MLC will be responsible for matching those royalties to copyright holders and paying them out.

Starting in 2020, the MLC will also become the governing body responsible for setting statutory royalty rates, replacing the trio of U.S. judges called the Copyright Royalty Board (CRB).

Do I even need a publisher anymore?

Absolutely. While the MLC collects and pays mechanical royalties for downloads and streams, it does not replace the job of a publisher. Keep in mind that the MLC does not collect performance royalties from performing rights organizations (PROs) like BMI and ASCAP, which use publishers to collect shares of compositions.

And the MLC only collects in the U.S. If your songs are bought or streamed internationally, you’ll need a publisher or publishing administrator like CD Baby Pro to track down those royalties.

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