Let’s face it. This past year has been tough in many ways. For the music community, this has been especially true. There is one bright spot. On January 1, 2021, big updates were made to the way songwriters can get paid when their music is played online via interactive streaming and download services. Specifically, the new blanket license for mechanical royalties established by the Music Modernization Act (MMA) became available, and a nonprofit designated by the Copyright Office, called The MLC, began collecting royalty payments, to be distributed to rightsholders under the blanket license later in the new year. That means now is the time to set your New Year’s resolutions to make sure you can take full advantage of the updates to the law, and get paid, in 2021. Here are three suggestions from the Copyright Office to get you started.
1.) Make sure you understand the difference between sound recordings and musical works.
Let’s start with the basics. All musicians need to understand the difference between sound recordings and musical works under the law.
- A musical work is a song’s underlying composition created by a songwriter or composer along with any accompanying lyrics. Musical work owners (songwriters, composers, or publishers) can get paid when their work is reproduced and distributed (via what is called a “mechanical” license), when their work is publicly performed or displayed, or when a derivative work is created.
- A sound recording is a series of musical, spoken, or other sounds fixed in a recording medium, such as a CD or digital file. Sound recording owners (performers, producers, or labels) can get paid when their work is reproduced or distributed, when a derivative work is created, or when the work is played publicly (via digital transmissions).
Musical works and sound recordings are each subject to different licensing rules. You may already know that performance rights organizations (PROs), such as ASCAP, BMI, or SESAC, license public performance rights for musical works to different services, venues, and radio stations. But this is different. Under the MMA, songwriters’ mechanical rights are subject to a compulsory “blanket license.” This means that digital music services can pay mechanical royalties for interactive streaming and downloads without securing individual licenses if they comply with statutory and regulatory requirements, including paying royalties and submitting usage reports to The MLC.
You can read more about the differences between sound recordings and musical works here.
2.) Make sure your song data is accurate, especially if you’re a self-administered songwriter, and know who will send that information to The MLC.
The MMA updates the way songwriters (as well as composers and music publishers) are paid when digital music providers use their work under the blanket mechanical license. But to get accurately paid under this new blanket license, The MLC must have accurate ownership data in its records. For self-administered songwriters, make sure you have all your song data, including the title, ISWC, ISRC, IPI* for all songwriters, and income splits. You will need to submit this information through The MLC’s registration portal to be eligible to receive royalty payments. If you are affiliated with a music publisher, they may take care of submitting this information for you, but regardless it’s still a good idea to have your data on hand and up to date for your own records.
3.) Spread the word.
Copyright and the MMA are designed to encourage and promote creativity. But these laws are only helpful if the music community is aware of them, and word of mouth is a powerful tool. To that end, we’d love it if one of your resolutions would be to help spread the word to other songwriters in your community by sharing this blog so everyone is ready for the changes to come under the MMA.
Eager for more information about the MMA? Check out our educational resources page, including our comprehensive guide How Songwriters, Composers, and Performers Get Paid, and subscribe to our MMA newsletter, Tuned In, for more updates as they are released.
* New to these acronyms? An industry acronym glossary is available here.