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The Breakdown: What Songwriters Need to Know about the Music Modernization Act and Royalty Payments

Calling all songwriters and music publishers—you may have already heard about the Music Modernization Act, or the MMA for short. But do you know how the law will affect the way you get paid?

Get the full breakdown on the Music Modernization Act, including more print and video resources on our MMA educational resources page.  

Basically, the MMA changes the way songwriters and music publishers are paid statutory mechanical royalties* when their work is streamed on interactive streaming services like Apple Music or Spotify, or sold on downloading services like Amazon Music. Beginning in 2021, a nonprofit entity designated by the Copyright Office, called the Mechanical Licensing Collective, or MLC, will collect and distribute these royalty payments to copyright owners of musical works matched to sound recordings in its database. And down the line, but no earlier than 2023, any unclaimed royalties can start being paid to copyright owners and songwriters of matched works according to each work’s market share. But to get paid, you will need to register your songs with the MLC. Sign up for the Copyright Office’s MMA newsletter to stay up-to-date on important developments, including when registration for the MLC’s database becomes available.

Remember though:

  • The MLC is not a performing rights organization (PRO), and registration with the MLC does not affect your ability to receive musical work royalties from PROs like ASCAP or BMI.
  • The MLC also does not distribute royalties resulting from private agreements, such as those negotiated with record companies, streaming services, or other distributors. Royalties for those uses will be paid according to the parties’ contract.
  • The MLC will only distribute mechanical royalties for use of musical works owned by songwriters or publishers. It will not distribute statutory royalties for use of sound recordings owned by performers, producers, or labels. SoundExchange distributes those royalties.
  • Registering your works with the MLC is not a replacement for registering your works with the U.S. Copyright Office, which can qualify you to go to court and collect statutory damages and attorneys’ fees if your work is infringed.

Want more info? Check out our page on the Music Modernization Act for educational materials, the history of this important law, and more.

*A mechanical license is a license that grants permission to reproduce and distribute recordings of certain musical works. Section 115 of the Copyright Act creates a statutory license for mechanical uses, which users can take advantage by paying required royalties and reporting information related to their use of the license. A copyright owner cannot say “no” to a statutory license for qualifying uses of their works.

 

11 Comments

  1. Mohammed Sheriff
    April 13, 2020 at 4:23 pm

    So be it.

  2. Angie Smith Riley
    April 13, 2020 at 11:32 pm

    Thanking you in advance for your enlightenment.

  3. SAMUEL SOLOMON, 3d
    April 14, 2020 at 11:52 am

    The Mechanical License Collective must be cognizant of false claims/percentage for copyright ownership for registered musical composition/Mechanical Rights. The MLC must also be cognizant of false/percentage claims for Sound Recordings/Master Rights administered by Sound Exchange. Do not take my comments “LIGHTLY”, I have been associated with the music industry for SIX (6) decades and my companies and I have been victimized numerous times by this type of action again and again. I hope the MLC will get all payment structures correct. Please do not just take the words of the music industry so-called major companies, the MLC must conduct its own research.

    • Holland Gormley
      April 14, 2020 at 3:56 pm

      Hi Samuel, thanks for your comment. We hope you will submit your comments to the Office’s forthcoming Unclaimed Royalties Study, where the Office will be recommending best practices to get complete and accurate ownership data into the MLC’s database. Keep an eye on our study page
      or NewsNet for when the comment period opens.

  4. Jereme Jones
    April 14, 2020 at 3:19 pm

    Thank you for your services and protection.

  5. MeDiAAiDeM
    April 20, 2020 at 7:30 pm

    It takes time to for the FTC and the Supreme Court to enforce Anti-Trust Laws…. I must be the only musician in the world, who does not have a Label or a Publisher firm and has a hit single.

  6. Janice LT
    May 18, 2020 at 11:54 am

    Yes, heard about the MLC efforts on behalf of Creators. Thank you, this validates our own efforts as Songwriters who lay the foundation for the work in production process.

  7. John Pichardo
    September 5, 2020 at 5:36 pm

    Will the MLC collect backdated claims of mechanical royalties under any capacity ? If so how long will that take publishers/ composers to be cut? Does the MLC function in other countries in terms of collections? Is there a reference diagram or dialog for rate calculations? Are MROs regulated for matching to rightful Publishers/ Composers? Are there plans to blanket model performance rights? I am HFA Publisher and Composer … I am an ASCAP member composer / publisher. Thank you.

    • Holland Gormley
      October 7, 2020 at 4:20 pm

      Thanks for your question. We would suggest that you refer to the Mechanical Licensing Collective’s (MLC) FAQ page for more info. Note that the MLC is only required to collect and distribute mechanical royalties for U.S. uses of musical works. You can find more info on rates here.

  8. Antonio
    December 21, 2020 at 5:11 pm

    If, in March 2021, I want to distribute a cover version only to Spotify and Apple Music do I still need to send a NOI to the songwriters?

    From what I gather, the MLC will take care of paying them the mechanicals. Is that right?

    • Holland Gormley
      January 6, 2021 at 11:51 am

      Hello Antonio, thank you for your question. If a digital music provider, like Spotify or Apple Music, is going to make and distribute “phonorecords” of a musical work (i.e., a recording of the song) to the public for private use, then it can use the Music Modernization Act’s blanket statutory license to do so. If a digital music provider chooses this route, they will then pay royalties and submit required reports to the Mechanical Licensing Collective who will pay the copyright owner — typically a publisher or songwriter. If someone is making a physical phonorecord, e.g., a CD, vinyl record, or cassette, then they can still get a statutory license using the Notice of Intent or “NOI” process. In that case, the person using the statutory license to make and distribute a physical phonorecord will be responsible for paying royalties and submitting statements of account, as required by the law. But whether the musical work is made and distributed by a digital music provider, an individual, or anyone else, if you are using the statutory license to create a cover song, remember that you cannot change basic melody or fundamental character of the musical work. You can, however, make an arrangement of the work to the extent necessary to conform it to the style or manner of interpretation of the performance involved.

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