Dear Member: 

Over the past two months, we have shared status updates with you on our efforts to match the data we received for historical unmatched uses and then pay out the matched royalties. If you want to catch up on any of these Member communications, you can find all the updates here. Today we are writing to let you know that we will be distributing the second set of royalties for matched historical uses this week in our July monthly royalty distribution. We also have an update for you on the process of determining the rates that will apply to the Phonorecords 3 rate period.

Today we will distribute the first set of matched historical royalties that were transferred from Apple Music to The MLC, totaling approximately $2.4 million. These matched royalties are for uses that took place during the Phonorecords 2 rate period (i.e., between January 1, 2013 and December 31, 2017). These historical royalties will be identified separately on the royalty statements we provide to Members, and we will specify the usage month for these historical royalties just like we already do for blanket royalties.

On Friday, July 1, the Copyright Royalty Board (CRB) — which sets the mechanical royalty rates that The MLC uses to calculate and distribute royalties — issued an initial ruling addressing the royalty rates for the Phonorecords 3 rate period. It is The MLC’s understanding that this initial ruling was not a final determination of the Phonorecords 3 rates, but rather just an explanation of the CRB’s decision on what those rates should be.  

A number of additional procedural steps will now need to take place before the CRB issues its final determination on these rates and they become effective. We do not know how long it will take for these additional steps to be completed, but based on previous proceedings, it could take several more months. Once the CRB issues a final determination and new regulations reflecting the new rates are published in the Federal Register, The MLC will have a better idea of when DSPs will begin reporting royalties at the new Phonorecords 3 rates. Until then, The MLC will continue to process new usages reported by DSPs pursuant to the blanket license at the existing Phonorecords 2 rates.

We will continue to provide you with updates as we begin paying out additional sets of historical royalties. We will also update you again on when you might expect to begin receiving royalties calculated at the new Phonorecords 3 rates once the CRB issues a final rate determination and the regulations implementing those new rates become effective.

The Support Team Is Here For You!

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