Where We Began

In order to launch full operations at the beginning of last year, 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 13 additional monthly royalty distributions – all on time or early – and distributed more than a half a billion dollars in digital audio mechanicals to our Members.

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™ by reviewing the data in our database, registering any missing musical works, and supplementing the data we had for your existing works where needed. For the last 14 months, you have answered our call, enabling us to process more than 13 million new works registrations and add data for more than 8 million new unique works to our database.

With the blanket royalty distribution process firmly established, we shifted our focus to the historical unmatched royalties. Starting last fall, we began methodically reviewing, ingesting, and preparing the more than 4,000 files of historical unmatched royalty data that 21 DSPs transferred to us in February 2021. Earlier this Spring, we completed our work on the first set of historical unmatched royalty data files and began running that data through our internal matching processes. Now we are ready to take our next step forward.

What’s Happening Today?

Members will be able to search this first set of historical unmatched data — data that remained unmatched after we completed our initial matching processes — using the Matching Tool in The MLC’s Portal. This initial set of data consists of all the remaining unmatched data for all historical time periods from the following six DSPs: Deezer, Hoopla, Pandora, SoundCloud, Tidal and iHeart.

Now, when Members use the Matching Tool to search for unmatched data that corresponds to their musical works, they will be searching the data from these six DSPs for both the remaining blanket unmatched data and the remaining historical unmatched data. To provide greater transparency around this process, unmatched usage data will now be identified in the search results within the Matching Tool as follows:

  • An “H” icon will indicate historical unmatched usage that took place before January 1, 2021 (the blanket license effective date)
  • A “B” icon will indicate blanket unmatched usage that took place on or after January 1, 2021
  • Search results that display both icons will identify unmatched usage that took place both before and after January 1, 2021

To the extent Members propose matches that cover data from any of these six DSPs, once accepted, The MLC will reference these matches when we process (or reprocess) blanket royalties and historical royalties in future distributions.

What Happens Next?

Now that we have completed the matching process for this first set of historical unmatched data, we can begin distributing historical royalties that we were able to match from this first set. We will start with uses for which DSPs did not previously pay any royalties, and we will begin by paying out those royalties for uses that took place during the Phonorecords 2 rate period (i.e., January 1, 2013 to December 31, 2017). These royalties will begin to be included in our next monthly royalty distribution in June.

Over the next few months, as we complete our internal matching processes for additional sets of historical unmatched data from other DSPs, we will add the remaining unmatched data from these additional sets to our database so that Members can search that data using the Matching Tool. Then we will begin distributing the “matched” historical royalties from these other DSPs, too — again, starting with uses that took place during the Phonorecords 2 period, for which DSPs did not previously pay royalties to any rightsholders.

What about Royalties for Phonorecords 3 Uses?

The Copyright Royalty Board (CRB) has not yet issued final rates for the Phonorecords 3 period (i.e., January 1, 2018 to December 31, 2022), though we are hopeful the CRB will issue those rates soon. Once the CRB issues final rates for the Phonorecords 3 period, we will immediately assess the extent to which DSPs will need to deliver any additional data and royalties. Once we receive any additional required data and royalties, we will begin processing the new data with the goal of beginning to match and then pay out royalties for uses that took place during the Phonorecords 3 period as soon as possible.

Thank You for Playing Your Part

For the past two and a half years, our team has worked tirelessly to launch our operations, stand up the blanket royalty distribution process, and develop a variety of tools for our Members. Thousands of you have supported our efforts by engaging with us and using these tools to ensure that the data we have for your musical works is accurate and complete. Together, our efforts have allowed us to distribute more mechanical royalties to more rightsholders than ever before.

With today’s announcement, we are excited to take the first step toward distributing the historical unmatched royalties transferred to us. This moment, while certainly a milestone, is also an opportunity to recommit ourselves to ensuring that the vision of the MMA is fulfilled for as many rightsholders as possible. We look forward to providing you with additional updates on our progress in the coming months as we make even more data available and distribute more royalties.