The Mechanical Licensing Collective Embarks on Comprehensive Audits of Digital Service Providers
2024: A New Era of Accountability and Transparency in Music Licensing
In a bold move to ensure the accuracy of royalty payments and safeguard the rights of songwriters and publishers, the Mechanical Licensing Collective (MLC) has announced its intention to audit all digital service providers (DSPs) that operate under the compulsory blanket license administered by the MLC since its inception in 2021. This sweeping audit initiative marks a pivotal step in the MLC’s mission to bring greater transparency and accountability to the complex world of music licensing.
The MLC’s decision to conduct these audits underscores its commitment to protecting the interests of music creators and ensuring that they receive fair compensation for their work. The audits will encompass a wide range of DSPs, including on-demand streaming services like Spotify, Apple Music, Amazon Music, Tidal, and Deezer; interactive streaming services such as Pandora, Mixcloud, and iHeart Radio; and music apps like Ultimate Guitar, PianoTrax, and WeavRun.
The MLC’s audits are intended to verify the accuracy of reported and paid royalties beyond the measures already taken by the organization. The audits will be conducted by experienced outside audit firms led by Jane Bushmaker, a music industry audit veteran and member of the MLC’s Analytics & Automation team.
A Statutory Responsibility: Ensuring DSP Compliance
The MLC’s right to audit DSPs is explicitly stipulated in the Music Modernization Act (MMA), the landmark 2018 law that created a new blanket license for musical work mechanicals. This blanket license replaced the previous song-by-song licensing system, which had become increasingly complex and ineffective for both digital services and the music business.
Under the old piecemeal licensing system, a substantial pool of unmatched and unpaid publishing royalties had accumulated, amounting to approximately $427 million. The MMA established the MLC to distribute these “blackbox” royalties and administer the new blanket license, thereby addressing long-standing inefficiencies and ensuring that songwriters and publishers receive their due compensation.
Protecting Songwriters and Publishers: A Collective Effort
The MLC’s audit initiative is a testament to its unwavering commitment to protecting the rights of songwriters and publishers. By meticulously examining DSPs’ royalty reporting and payment practices, the MLC aims to uncover any discrepancies or inaccuracies that may have resulted in underpaid or unpaid royalties.
The MLC’s efforts are particularly timely in light of recent developments, including Bridgeport Music’s decision to exercise its right to audit the MLC. Bridgeport Music, known for its assertive approach to copyright enforcement, has a history of taking legal action against alleged copyright infringements. Its decision to audit the MLC highlights the growing importance of ensuring transparency and accountability in the music licensing landscape.
A Collaborative Approach: Working Towards a Shared Goal
The MLC emphasizes that its decision to audit DSPs is entirely independent of Bridgeport Music’s actions. The MLC’s audits are a fundamental part of its statutory responsibilities under the MMA, and they are intended to safeguard the interests of all songwriters and publishers who rely on the organization to collect and distribute royalties.
The MLC’s audit process is designed to be collaborative and constructive. The MLC will work closely with DSPs to gather the necessary information and documentation, ensuring a thorough and efficient audit process. The MLC is committed to communicating the results of its audits transparently, providing members with clear and detailed information regarding any recovered royalties.
A New Era of Accountability: The MLC’s Commitment to Transparency
The MLC’s comprehensive audit initiative marks a new era of accountability and transparency in music licensing. By diligently auditing DSPs, the MLC is taking proactive steps to address potential discrepancies and ensure that songwriters and publishers receive the royalties they deserve.
The MLC’s unwavering commitment to protecting the rights of music creators is evident in its comprehensive approach to royalty collection and distribution. The organization’s audit initiative is a testament to its dedication to fostering a fair and equitable music licensing ecosystem, where songwriters and publishers can confidently rely on the MLC to safeguard their interests and ensure that their creative works are appropriately compensated.
Full List of Companies Intending to Be Audited by the MLC:
1. Spotify
2. Apple Music
3. Amazon Music
4. Tidal
5. Deezer
6. Pandora