A new tool for artists to collect royalties has been established recently, and WordPlay T. Jay is here to explain everything about the Mechanical Licensing Collective (MLC).

The MLC was created as a result of the Music Modernization Act, which was passed in 2018. It aimed to reconfigure compensation for writers and publishers and update copyright protections, which hadn’t been changed in the last 40 years.

So what were the issues that brought on the Music Modernization Act?

Firstly, artists and labels were earning more than five times what songwriters were making. Digital Service Providers (DSPs) like Spotify, Apple Music and others also wanted to simplify the payment-making process.

Songwriters for pre-1972 content were also getting left out of DSP payments. Producers and engineers were being left out of the royalty process. And finally, royalties had not changed since 1972.

So, how did the Act solve these issues?

It forced DSPs to pay a mechanical rate based on streams, not just physical sales and downloads. Notices of intent were also removed, which allowed DSPs to not pay artists if they didn’t respond to a notice saying they would play the artists’ music.

Performance Rights Organizations can also now ask judges to change royalty rates, and judges are required to rotate roles so the rates have an opportunity to be changed.

Writers, publishers, producers and engineers of pre-1972 content also now get royalties, with SoundExchange handling them for producers and engineers.

DSPs also now pay for a licensing agency so songwriters can sign up for free.

That agency is the MLC. so, if you are a writer and need to license your music, you can do so at MLC.com.

The MLC is a non-profit organization that administers mechanical licenses to DSPs in the U.S. It collects royalties from the DSPs and pays them out to songwriters, composers, lyricists and publishers. They are represented by Harry Fox Agency and Consensys, which will handle the MLC operations.

According to CDBaby, the current mechanical royalty rate for physical music is 9.1 cents for recordings under 5 minutes and an extra 1.75 cents per minute after 5. Streaming services pay 4-6.75 percent of revenue in royalties. With Spotify making $7 billion in 2019, it should have paid out about $300 million in royalties.

But did they?

To make sure you get your due, register with the MLC if you do not have a publishing administrator. Report your royalty percentages to them, then let the DSPs do the math, make payments back to the MLC, then you collect.

Also, if you have a publishing administrator, make sure to check every 3-6 months to make sure your royalties are coming in.

For more information about the MLC and royalties, check out the video below!