In the first half of this year, we have had several opportunities to give updates on The MLC’s operations to Congress — both in Washington, D.C. and here in Nashville.
I hope you all are enjoying your summer! In the first half of this year, we have had several opportunities to give updates on The MLC’s operations to Congress — both in Washington, D.C. and here in Nashville. In both instances, we were grateful for the opportunity to share these updates directly with members of Congress and their staff members.
It was also rewarding to hear them praise the work we’ve done so far to get The MLC up and running. While we still have lots of work to do, we value their continued interest and support in our efforts to realize their vision for a more effective, accurate and transparent system of administration for digital audio mechanical royalties here in the United States.
With the completion of our June monthly royalty distribution, The MLC’s 27th overall, we have now distributed more than $1.1 billion in blanket royalties to our Members. We are proud that each of those distributions has continued to be completed on time or early.
In addition to sharing these updates, in this Quarter Note we include our recently published 2022 Annual Report, information about the Phono 3 rate determination and an update about our historical unmatched data.
We are so grateful for the support and partnership we receive from so many of you. Thank you for taking the time to read our updates each quarter. We hope to see you at some upcoming industry events!
In June, CEO Kris Ahrend, testified in Nashville before the House Judiciary Subcommittee on Courts, Intellectual Property and the Internet, at a field hearing entitled “Five Years Later — The Music Modernization Act.” In addition to answering questions about The MLC’s work from the Committee members in attendance, Kris provided an update on The MLC’s operations, including the growth to more than 28,000 rightsholder Members and the distribution of more than $1 billion in royalties to date. The MLC is grateful for the Subcommittee’s time and for the participation of all of the other stakeholders who testified, to address the work of The MLC and all those across the industry working to ensure that rightsholders receive the royalties they are due under the blanket mechanical license. To read Kris’s full written statement, click here.
The MLC’s 2022 Annual Report is now available on our website. The report offers a look into our second full year of operations, key performance metrics from 2022, a financial summary and more.
On May 23, the Copyright Royalty Board (CRB) issued its initial rate determination for the Phono 3 rate period. This initial determination and the publication of the corresponding regulations that accompany the initial determination represent the next important step in the CRB’s process of finalizing the rates for the Phono 3 rate period.
Once the rate determination is finalized and published in the Federal Register, DSPs will have 6 months to deliver revised data and any royalties they may owe under the final Phono 3 rates — both for the historical unmatched usage previously reported (for 2018, 2019 and 2020) and for usage under the blanket license previously reported (for 2021 and 2022). The MLC has already begun working with DSPs to prepare for their delivery of this revised usage data. For more information, you can read more and check out our timeline here.
In May, we completed running our final set of historical unmatched data files through our internal matching process. During the Congressional Field Hearing in Nashville, we announced that we had matched nearly 70% of the historical unmatched royalties transferred to us by DSPs. That means that nearly $300 million in historical royalties will be eligible to be distributed to Members provided they have claimed their shares of the works that we’ve matched to those historical royalties. Members can use our Claiming Tool to search for — and claim — any missing shares of their songs that other Members have registered with The MLC, and Members can use our Registration Tools to register any songs that have not yet been registered with us.
Members can also use our Matching Tool to search for uses of their works in the remaining unmatched data we have for those historical royalties. (The one exception is the historical data we received from FanLabel, which contains issues that FanLabel has not been able to rectify.) By providing our Members with full visibility into all of our remaining unmatched sound recording data, we have fully illuminated the "black box" for digital mechanicals for the first time in history and given Members the ability to help us eliminate the black box by proposing matches to their registered works. We’ve already reviewed and approved matches for more than 800,000 previously unmatched groups of recordings that our Members submitted using the Matching Tool. Once we approve a proposed match submitted by a Member, they will be able to receive any previously unmatched historical royalties we received for their song and any unmatched blanket royalties we have received since The MLC launched full operations.
