Streaming Providers Pay $424 Million in Unmatched Royalties to Mechanical Licensing Collective

Streaming services including Spotify and Apple Music have paid $424,384,787 in accrued historical unmatched royalties (or “black box” money) to the Mechanical Licensing Collective, the MLC announced on Tuesday. Once the MLC analyzes the data to pay copyright holders, songwriters and publishers who have applied to be MLC members will begin receiving royalty payments and statements as soon as April, Variety reports. The MLC will also maintain a public database and will make it so registered users can submit claims.

Today’s payment to the MLC marks one of the first steps outlined by the Music Modernization Act law, which dictates that the MLC has a responsibility to distribute unmatched royalties to rights holders within two years. After the two-year period has passed, the MLC has the option to distribute the remaining unmatched money to publishers on a market share basis.

The highest amounts transferred from digital streaming platforms to the MLC came from Apple Music (over $163 million), Spotify (over $152 million), Amazon (over $42 million), and Google/YouTube (over $32 million).

National Music Publishers Association President/CEO David Israelite called the MLC’s payment a “massive win” in a statement. “Songwriters and music publishers have for years fought to ensure they were paid accurately and fully by digital streaming services,” he said. “‘Unmatched money’ has plagued the industry and today, thanks to the Music Modernization Act, we know that it amounts to just under $425 million—not including money previously paid out in multiple million-dollar settlements.”

Michelle Lewis, Songwriters of North America’s executive director, urged SONA members to become members of the MLC to learn how they are eligible. “This money will now be matched and find its way to the rightful songwriters and publishers that earned these royalties,” Lewis said. “We encourage all SONA members, along with every songwriter, to go to theMLC.com to learn how they are eligible to join or participate, which is critical to ensuring every writer who earned this money gets their fair share of these royalties.”

Kris Ahrend, CEO of the MLC, said in a statement that the MLC has spent over a year developing resources and conducting outreach to creators and publishers. “We have also been fortunate to receive valuable input and guidance from our Board and Committee members—songwriters, publishers and digital service executives themselves—which has helped shape the MLC’s mission and scope of work since passage of the MMA,” Ahrend said. “The arrival today of the License Availability Date marks yet another milestone in the process of making the promises of the MMA a reality, and the MLC team could not be more excited.”

The Artist Rights Alliance released a statement saying the transfer of unmatched royalties is a “great start—but there’s a lot of work still to be done to get that money to the songwriters that earned it.” The ARA statement continues:

We are grateful to the Copyright Office team that skillfully and doggedly worked through a number of complex issues in the months leading up this transfer, including major disagreements about the proper treatment of past industry settlements. 

In the months ahead we look forward to engaging further with the Office about efforts by publishers who have already been paid for historical usages via settlement agreements to seek double payment out of these new funds. As we have told the Office in our prior filings, the major publishers that already settled with digital services and received payment from them should not be allowed to claim a further share of the monies transferred to The MLC today.

 Today’s news is a huge step forward for songwriters – one made possible by so many stakeholders all across the music community who came together to work for passage of the Music Modernization Act and continue to work in good faith as it is implemented.

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