2024: The Mechanical Licensing Collective Embarks on Comprehensive Audits of Digital Service Providers
The music industry has undergone a transformative shift with the advent of digital streaming services, revolutionizing the way we consume, share, and pay for music. However, this digital era has also brought forth challenges in ensuring the accurate and timely compensation of songwriters and music publishers for the use of their works.
In a bold move aimed at safeguarding the rights of music creators, the Mechanical Licensing Collective (MLC), the entity responsible for administering compulsory blanket licenses for musical works in the United States, has announced a comprehensive audit initiative of all digital service providers (DSPs) operating under its blanket license. This unprecedented move signals a commitment to enhancing transparency, accuracy, and fairness in the music licensing ecosystem.
Background: The Music Modernization Act and the MLC
The Music Modernization Act (MMA), enacted in 2018, marked a pivotal moment in the history of music licensing in the United States. This landmark legislation introduced a new blanket license for musical work mechanicals, replacing the antiquated song-by-song licensing system that had become cumbersome and inefficient for both digital services and the music industry.
The MMA also established the MLC, tasked with the crucial responsibilities of distributing the accumulated royalties from the previous licensing system, often referred to as “black box” royalties, and administering the new blanket license moving forward. The MLC’s mission is to ensure that songwriters and music publishers receive their fair share of royalties for the use of their works in digital formats, including on-demand streaming services, internet radio, and music apps.
The MLC’s Audit Initiative: Ensuring Accuracy and Transparency
The MLC’s decision to conduct audits of DSPs is a significant step in fulfilling its statutory responsibilities under the MMA. By verifying the accuracy of royalty reporting and payments, the MLC aims to protect the interests of songwriters and music publishers, guaranteeing that they receive their rightful share of royalties for the use of their works on digital platforms.
To oversee this critical process, the MLC has appointed Jane Bushmaker, a seasoned music industry audit veteran and member of the MLC’s Analytics & Automation team. Bushmaker’s expertise and experience in the field of music auditing will be instrumental in ensuring the thoroughness and effectiveness of the audits. The MLC has also engaged experienced external audit firms to conduct the audits, further demonstrating its commitment to transparency and accountability.
Significance of the Audits: A Milestone in Music Licensing
The MLC’s audit initiative marks a watershed moment in the history of compulsory mechanical licensing in the United States. For the first time in over a century, DSPs will be subject to audits to ensure compliance with the blanket license. This enhanced oversight mechanism provides greater protection for songwriters and music publishers, safeguarding their rights and ensuring fair compensation for their creative contributions.
The audits will also contribute to the overall integrity and efficiency of the blanket licensing system. By verifying the accuracy of royalty reporting and payments, the MLC can identify and address any discrepancies or errors, ensuring that songwriters and music publishers receive the royalties they are entitled to. This will foster a more transparent and equitable music licensing ecosystem, benefiting all stakeholders involved.
Conclusion: A Commitment to Fairness and Sustainability
The MLC’s comprehensive audit initiative represents a proactive and necessary step towards ensuring the accuracy and transparency of royalty payments to songwriters and music publishers in the digital age. By auditing DSPs, the MLC is fulfilling its statutory responsibilities under the MMA and demonstrating its commitment to protecting the rights of music creators.
The audits will contribute to a fairer and more efficient music licensing system, benefiting all stakeholders involved and ultimately fostering a vibrant and sustainable music industry. The MLC’s actions serve as a testament to its dedication to ensuring that songwriters and music publishers are fairly compensated for their creative works, allowing them to continue creating the music that enriches our lives.