Most songwriters and artists have hopefully by now heard of the Music Modernization Act (MMA) which was signed into law last fall. The bill directed songwriters, publishers and digital services to come together to form a collective which will be responsible for licensing mechanical rights, paying royalties and creating a database of copyright ownership information. This collective is referred to as the Mechanical Licensing Collection (MLC).
For songwriters this new collective is a once-in-a-lifetime opportunity. It gives us a seat at the table and a way to oversee our own royalties in lock step with publishers, something that I’ve never seen in my twenty year career. And it provides the first chance in a generation to build a collective — through collaboration and consensus — that can improve how we as songwriters manage our rights and are paid for the use of our songs. It’s also being underwritten by the digital streaming companies and will undo some of the wrongs of the past by getting more money out of the black box and into the hands of independent and published songwriters.
I admit the concept of this new mechanical licensing collection (MLC) has been a difficult one to grasp, mainly because it’s being created in real time. The good news is its incited a collaboration among many different institutions in the industry including a group of published and independent songwriters, major and independent publishers, the Nashville Songwriters Association International (NSAI), the Songwriters of North America (SONA) and the National Music Publishers’ Association (NMPA) and technology companies. We are referring to ourselves as the “industry consensus MLC” so as to not create any more confusion around what we aim to do – which is follow the law that has been laid out for us in the MMA.
In March, we filed a 125-page submission with the Copyright Office that explained why our MLC was the most qualified to fulfill all the responsibilities of the collective and best represent all songwriters. Most of the music industry agreed with our “industry consensus MLC.” We have the support of thousands of songwriters, 130 indie publishers and groups such as the four PROs (ASCAP, BMI, SESAC and GMR), the Association of Independent Music Publishers (AIMP), the American Association of Independent Music (A2IM), the Recording Industry Association of America (RIAA) and many more.
But amidst all this great momentum, there is misinformation out there that threatens to dampen the enthusiasm and excitement of songwriters and the industry at large around this new collective. A group of songwriters (who have submitted a competing bid to become the new collective) claim that “our industry consensus MLC” would not properly represent all songwriters; will distribute unmatched money due to writers to larger publishers; and has a budget that is too costly. This couldn’t be more wrong.
In reality, the “industry consensus MLC” is designed to empower these exact creators. It is not only open to songwriters, it is governed by independent and published songwriters who are open to hearing the concerns of our community and making sure they are addressed. Throughout my career, there have been many times that I have been at odds with the standards in publishing agreements that I have signed and even passed through to my writers. Songwriters were not there during the creation of these standards but we have a unique opportunity to (alongside publishers) now create guidelines that will benefit all songwriters. We aim to collaborate but our voices will be heard when we don’t agree.
Right now, the “industry consensus MLC” is working to choose a vendor and develop an ownership database that is transparent and publicly accessible by all, including songwriters, to claim royalties that are owed. This will mean that more of our royalties are matched and paid to the proper person. Where there is unmatched money, however, the law states clearly that any entity that is designated as the collective must treat the unmatched money the exact same way, so there can be no bias here. The law is clear: unmatched money must be held and attempt to be matched to a proper owner for “at least 3 years” and then must be distributed by market share “based on usage.” Additionally, 50% of unmatched royalties must be distributed to songwriters. And for our “industry consensus MLC,” if there are disputes about unmatched money, the committee responsible for overseeing those disputes is entirely controlled by independent publishers and songwriters.
Creating a new collective that can improve music licensing and ensure the proper payment of royalties isn’t cheap but that’s mainly because we have a deadline and need to ensure that once we are live, our system works. More funds for the collective mean better services for songwriters and publishers. And one of the biggest benefits of the law is that funding for the new collective is paid for by digital services and not by creators through commissions. So, in essence, the costs are irrelevant to us because for the first time creators are not paying for it. We need to focus on making sure digital services are providing every penny needed to ensure this MLC is a success.
Ultimately, every songwriter will have the opportunity to make sure the industry consensus MLC is working for them. The law says that regardless of which entity becomes the collective — the MLC must operate in a fully transparent and accountable way. Our “industry-consensus MLC” will have extensive oversight and reporting obligations to the Copyright Office. It will be required to make its budget and by-laws publicly available and, copyright owners will be able to audit the collective to ensure proper payment of royalties.
The only way to build a successful collective is to make it a collaborative effort, bringing together all songwriters and music publishers, whether small or large, independent or major, to establish and jointly govern this new MLC. Our “industry consensus MLC” will need the input and involvement of ALL industry participants to succeed in ensuring digital services are properly licensing, finding copyright owners and accurately paying royalties to creators.
Songwriters: Take a moment to get the facts about what we are doing. For the MLC to truly work to our benefit, songwriters need to be educated about it, be on top of registering their songs and actively involved in settling split disputes so money can be paid out properly. The MLC is a historic tool but we need to take control of making sure we populate it with correct and up to date information. That’s on us!
Kara DioGuardi is a Grammy-nominated songwriter, former American Idol judge, producer and music publisher. For the past five years, she has been a Herb Albert Visiting Scholar at Berklee College of Music. She is a member of the industry consensus MLC’s board of directors.