Historical Royalties

In order to launch full operations at the beginning of 2021, as required by the Music Modernization Act of 2018 (MMA), we began by building the systems and capabilities needed to receive and process the data required to distribute blanket royalties. This work allowed us to complete our first monthly royalty distribution on time in April of 2021. Since then, we have completed royalty distributions on time (or early) every month — paying our Members the digital audio mechanicals they are due.

At the same time, we established our public database of musical works data, launched our Matching and Claiming Tools, and invited you, our Members, to Play Your Part™ in The MLC process by reviewing the data in our database, registering any missing musical works, and supplementing the data we had for your existing works where needed. Since these tools were launched, you have answered our call, enabling us to process millions of new works registrations and add data for millions of new unique works to our database.

After we completed the matching process for this first set of historical unmatched data, we began distributing historical royalties that we were able to match from this first set, starting with uses for which DSPs did not previously pay any royalties. The MLC began distributing matched historical royalties for uses that took place between 2007 and 2017 in our June 2022 royalty distribution.

As we completed our internal matching processes for additional sets of historical unmatched data from other DSPs, we added the remaining unmatched data from these additional sets to our database so that Members can search that data using the Matching Tool. Then we began distributing the “matched” historical royalties from these other DSPs, too — again, starting with uses that took place during the Phonorecords II (Phono 2) period, for which DSPs did not previously pay royalties to any rightsholders.

Because the rates for the Phonorecords III (Phono 3) rate period had still not been finalized, we started by distributing matched royalties for historical uses that took place during the earlier rate periods for which the rates had been finalized (i.e., the uses that took place from 2007 to 2017). We began with fully unmatched uses, where no payment had been made to any rightsholder. We worked through almost all of these uses by the end of 2022, distributing approximately $11.4 million (or 21.6%) of the roughly $53.4 million in unmatched royalties we received for these older periods. We then expanded to include partially unmatched uses for which DSPs had paid some, but not all, of the royalties.

In March 2023, we began our second pass at processing the usage from these periods, by processing those uses for which DSPs previously paid some, but not all, of the royalties owed for these uses. The first matched royalties from this second pass appeared on statements issued in our March 2023 distribution.

As of June 2023, we have increased the matched royalties that we have distributed for these older uses to more than $24 million, or 45% of the royalties we received for these older periods. 

The MLC is now actively trying to match as much of the historical unmatched royalties as it can to the registered works in our database. Once matched, The MLC will then process and distribute the matched royalties. While the law requires The MLC to continue to attempt to match the remaining historical unmatched royalties for at least three years, there is no deadline that cuts off The MLC’s efforts to match, and The MLC’s Board of Directors has not made any decisions about when that might happen. When The MLC does eventually exhaust its matching efforts, The MLC will distribute the remaining unmatched royalties to music publishers and self-administered songwriters using a market share/activity-based formula. Music publishers who receive historical unmatched royalties from The MLC must pay AT LEAST 50% of those royalties through to their songwriters. If you are a songwriter represented by a music publisher and you earned digital mechanical royalties during the period in question, you should receive a portion of any remaining historical unmatched royalties distributed to your publisher for that same period.

The following table provides information on transfers of accrued unmatched royalties (Transfers) by DSPs to The MLC pursuant to the Music Modernization Act of 2018 (MMA), 17 U.S.C. 115(d)(10)(B)(iv)(III)(aa). This provision of the MMA required DSPs to transfer to The MLC by February 15, 2021 all accrued royalties for unmatched uses of musical works that occurred prior to January 1, 2021 as one of the conditions of eligibility for a specified limitation on liability for prior infringements. Please note that, if certain conditions are met, the law permits DSPs to adjust the amount of accrued unmatched royalties they have transferred to The MLC (see, e.g., 37 CFR 210.10(k)). 

The MLC is required under the MMA to engage in diligent efforts to publicize any Transfers (or Transfer adjustments) made by a DSP throughout the music industry. 
 
DSPs that make Transfers (or Transfer adjustments) must certify the accuracy of all of the data they deliver to The MLC. The MLC’s acceptance of Transfers, or posting of information on Transfers, does not constitute certification or approval by The MLC of the accuracy of any information accompanying any Transfer, the validity of any certification, or the eligibility of any DSP to make a Transfer or to obtain a limitation on liability.  Finally, The MLC’s posting of that information in this section of our website does not constitute a representation or confirmation of any kind that a DSP has met the legal requirements necessary to obtain a limitation on liability under the MMA for any prior infringing uses.
 
If you have any questions about the information displayed below please contact the DSP directly.