Since April, we have been distributing matched historical royalties in sets. For each set of royalties from a given DSP (or DSPs), we first distribute matched historical royalties for previously unpaid uses reported by the DSP (or DSPs) concerned, and we then we aim to distribute matched historical royalties for previously partially paid uses from that same DSP (or DSPs) in the following month.
In October, we distributed $39 million in historical royalties. Of this amount, more than $38 million originated from Spotify usage in 2020, while the rest of these royalties were from reprocessing of the remaining historical usage from previously completed distributions.
Much of the $38 million relates to previously unmatched historical usages on Spotify from 2020, but a portion of this amount represents royalties for previously partially paid usages on Spotify from 2020 that were inadvertently processed and distributed in October instead of in the November distribution as intended. We will correct this issue in the November distribution by reversing the incorrectly calculated royalties distributed in October and adding corrected royalties to the November statements for the Members entitled to receive them.
Historical Unmatched Royalties
As mentioned above, we continue to reprocess the remaining historical usage from previously completed distributions, with the hope of distributing even more historical royalties. We were able to distribute an additional $913k last month (plus interest) by reprocessing the remaining unmatched historical usage from the Phono 3 rate period, and we distributed an additional $103k last month (plus interest) by reprocessing the remaining unmatched historical usage from the Phono 1 and 2 rate periods. These royalties relate to usages that took place on a number of different digital services.
Overall, we have now distributed more than 89 percent of the previously unmatched royalties for uses that took place during the Phono 1 rate period, more than 51 percent of the previously unmatched royalties for uses that took place during the Phono 2 rate period, and now more than 47 percent of the previously unmatched royalties for uses that took place during the Phono 3 rate period. Combining the data for all three rate periods, we have now distributed more than 48% of the total amount of previously unmatched royalties transferred to us by DSPs, bringing the total amount of previously unmatched historical royalties transferred by DSPs to The MLC that The MLC has been able to match and distribute to more than $190 million.
Consistent with the way we’ve handled matched historical royalties in the past, the matched historical royalties we distributed in October are clearly identified on your royalty statements, and we specify the usage month for these historical royalties just like we do for blanket royalties. As we have always done, we’ve distributed matched historical royalties using the same payee data that we used to distribute blanket royalties (i.e., we’ve distributed royalties to the “current payee” registered in The MLC database, as reflected in the snapshot of ownership data we used for this month’s blanket royalty distribution).
What’s Next?
As discussed above, in our November distribution we will reverse the royalties from the second set of Spotify’s 2020 usage that we inadvertently distributed in October and then distribute the corrected amounts for this second set of matched historical royalties from Spotify’s 2020 usage. Looking ahead to December’s distribution, we intend to begin processing the first set of matched historical royalties from Amazon. Just as we have done with the historical usage we have already processed, we will first distribute matched historical royalties for previously unpaid uses reported by Amazon, and then we will distribute matched historical royalties for previously partially paid uses from Amazon.
We expect to continue this process for the remaining Phono 3 historical usage through the end of this calendar year and into the Spring of 2025, until we have finished distributing all of the previously unmatched historical royalties for uses from the Phono 3 period that we have been able to match to registered works in our database for the shares of those works that our Members have claimed. The following table shows our current schedule for processing this remaining Phono 3 historical usage. If for any reason this schedule changes, we will share our updated schedule with you in our future Member newsletters.
Where can I learn more?
We will continue to provide monthly recaps and previews about the matched historical royalties we distribute for uses from the Phono 3 period in our monthly Member newsletters.
To catch up on the progress we’ve shared about historical unmatched royalties so far, you can find all the updates here. You can also read an overview on our historical unmatched royalties page (which reflects the most current Phono 3 adjustments) here.
As always, if you have any questions about any of these updates, or anything else related to The MLC, please don’t hesitate to contact our Support Team.