New “Mechanical Licensing Collective” the Result of Music Modernization Act

mechanicalThe Music Modernization Act which passed with bipartisan support in Congress on April 25th is designed to bring the laws surrounding music rights into the 21st century. The way consumers are digesting music has changed drastically since the 1900s, with streaming now being the biggest growth driver in the music industry. While the MMA covers a huge spectrum of music copyright, it has beget the Mechanical Licensing Collective. The MLC will:

“create and maintain the world’s most thorough database of music composition copyrights and their owners, collect mechanical royalties from digital music streaming services, and transmit those royalties to copyright holders based on the ownership claims set forth in the database.” – John Miranda

Mechanical copyrights are the same issue behind the Wixen Music Publishing lawsuit against Spotify. Songs have two licensing associated with them, a right to the sound recording and right to the composition. The right to the composition is how artists get compensation for specific numbers of streams or downloads or distributions. Sound recording royalties get paid to the record labels.

Traditionally a streaming service or distributor would file a Notice of Intent with the US Copyright Office. The popularity of streaming has inundated the Copyright Office with these notices, so the MLC will do away with them. Instead of a streaming service assuming the notice will get bogged down in bureaucratic hell and never have to pay the royalty, it will instate a blanket mechanical license. This will allow artists to get paid what they deserve for their work.