The Music Modernization Act that passed in October 2018 was hailed as a landmark achievement for the music industry in creating a solution to several issues that have long plagued the business, particularly in the digital age. And today (Nov. 14) marks another critical step forward for the functions the MMA mandates, including the funding for a central database that will allow for the matching of song recordings to rights holders so that songwriters and publishers can get paid for the use of their copyrighted works.
The Mechanical Licensing Collective (MLC), which was established by the Copyright Royalty Board earlier this year to build and operate the central database, today reached an agreement with the Digital Licensing Coordinator (DLC), which represents the digital music services that the MMA mandates must fund the MLC, to provide the funding for the implementation and operation of the MLC and its database. The MLC must be up and running by Jan. 1, 2021, according to the legislation.
Under the agreement, the MLC will receive $33.5 million in startup costs, as well as a first-year operating budget of $28.5 million, with the bill being split among the digital services — Amazon, Apple, Google, Pandora and Spotify — proportional by size, with the largest footing the larger portion of the payment. The MLC board had originally requested $37.25 million in startup funding and a first-year operating budget of $29 million, according to a document the organization filed with the CRB on Sept. 13. Before the formal collections for the MLC costs begin in 2021, the DLC will provide interim financing.