Happy spring, all! The arrival of 2024 marked the beginning of our fourth year of operations, and we are proud that during our first three years we were able to complete every single distribution either on time or early.
After the completion of March's distribution, we are excited to announce we have reached another significant milestone:
Our cumulative total royalties from all distributions includes $1.823 billion in blanket royalties and an estimated $193 million in voluntary royalties, calculated at statutory rates.
In this Quarter Note, we also highlight our 2023 Annual Royalty Recap and provide updates about Phonorecords III (Phono 3) royalty adjustments, the periodic review of designation of The MLC, and DSP audits. Finally, we share an opportunity for you to show your support for The MLC by adding your name to the list of industry organizations and professionals who endorse our continued designation by the U.S. Copyright Office.
We are grateful for your continued support and help spreading the word about The MLC — all of which help us reach each new milestone we share.
In February, we shared our 2023 Annual Royalty Recap with our Members, highlighting our 2023 distributions, updated cumulative statistics from our 2021 and 2022 distributions and our cumulative total royalties distributed (as of the February 2024 distribution). Here are the key takeaways from the report:
2023 Royalty Distributions: For the 12 monthly distributions in 2023, The MLC processed $980.0 million, directly distributed more than $732.1 million in royalties, and processed usage covered by voluntary licenses maintained by DSPs at an additional estimated value of $46.5 million (based on applying the statutory rates) — bringing our total royalties distributed during the year to roughly $778.6 million.
Continued Improvement: As a result of our efforts and the influx of so much additional data, we were able to pay out more than $37 million in additional royalties for those nine royalty periods completed in 2021, pay out more than $25 million in additional royalties for those 12 royalty periods completed in 2022, and correspondingly reduce the amount of unpaid royalties we were holding for both of those periods.
3 Years of Royalty Distributions: In our first three years of distributing royalties, The MLC distributed more than $1.803 billion in total royalties (more than $1.624 billion in blanket royalties and an estimated $179.2 million in voluntary royalties when calculated by applying the statutory rates).
For additional comparative metrics (for our 2021, 2022 and 2023 distributions), please check out our full report:
In February, we provided our Members with a high-level aggregate summary of the Phono 3 royalty adjustments, which were due from DSPs on February 9, which can be found here. Included in that summary was a breakdown of the adjustments to mechanical and performance royalties that have been reported to The MLC as of February 23, 2024. This month, we shared that we added a new page on our website explaining more about the performance royalties DSPs report to The MLC and how those can impact the mechanical royalties they owe. You can find this new page here.
On January 30, the Register of Copyrights initiated the periodic review of the designation of The MLC, as required by The Music Modernization Act (MMA) every five years. During this review period, the Register will collect information concerning whether the designation of The MLC should continue. During this process, the Register cannot change the provisions of the MMA, the structure of The MLC’s governance that is established in the MMA or the blanket license royalty rates or terms. To read the official notice, click here. To read more information about the periodic review of designation, click here.
One of the factors that the Register considers in their designation review process is the endorsement and support that The MLC has received from musical work copyright owners, which includes all those with the exclusive right to license musical works for activities covered by the blanket license. The MLC is now collecting endorsements again, to show the Register that they continue to have the support of rightsholders and industry stakeholders. If you’d like to add your name to the list of industry organizations and professionals who endorse our continued designation, please click below:
The MLC sent notice letters to 49 digital service providers (DSPs) that began operating under the blanket license The MLC administers in 2021. These notices constitute the first step in The MLC's exercise of its right to audit the books and records of these DSPs to verify the accuracy of the royalties they have paid to The MLC for uses that took place in 2021, 2022 and 2023. You can read more about this processhere.
We've created some new videos from frequently asked questions. Check out one of our latest videos below, and visit our YouTube channel to learn more.
