October 2026 Blanket Royalties Update

We continued to process adjustments to blanket royalties for usage originally reported during the last two years of the Phono 3 rate period (i.e., 2021 and 2022). These adjustments represent the difference between the royalties we initially processed for the usage periods from those two years at the Phono 2 rates and the royalties that are due at the final Phono 3 rates. In the October distribution, we processed blanket royalty adjustments for Apple’s Q4 2021 usage in the amount of $3.5 million and Apple’s July-November 2022 usage in the amount of $2.8 million.

As we previously shared with you, certain Phono 3 adjustments reported by Spotify and Apple were not allocated correctly among the individual offerings reported by each service, which resulted in overpayments or underpayments to some Members. This did not impact the total amount of adjustments we previously processed for either DSP. We have already resolved the issue on a prospective basis, and corrections related to previously processed Apple adjustments were included in our June distribution. In the October distribution, we processed corrections to Spotify’s previously processed adjustments for 2021 (January-June, September, November, and December) usage.

This month, we also continued to process adjustments for 2023 delivered to us by certain DSPs in connection with their Annual Reports of Usage (ARoU). In the October distribution, we processed blanket royalty adjustments for Spotify’s January 2023 usage in the amount of $1.4 million. We also processed blanket royalty adjustments for Apple’s Q3 2023 usage, which reflected a net overpayment of $975k.

Also in the October distribution, we reprocessed adjustments to royalties originally reported in 2021, 2022, and 2023, and the resulting royalties totaled approximately $482k.

To the extent the royalties from these adjustments pertained to works in your catalog, you will see them identified on your statement by the category type ["Adjustments"], along with the names of the specific DSP for which the adjustment was made.

For a clear, up-to-date overview of blanket mechanical royalties reported to us by DSPs that operate under the blanket license we administer — including breakdowns of amounts collected, matched, distributed, and more — check out our Blanket Royalties Dashboard here.

Update on DSPs Operating Under The Blanket License

The blanket compulsory license The MLC administers is available to eligible DSPs to cover the eligible services they operate in the United States. New DSPs may choose to obtain the blanket license by submitting a statutorily prescribed notice to The MLC. KLAY Vision, Inc. obtained the blanket license on September 18 and indicated a launch in 2027.

Existing blanket licensees may choose to stop operating under the blanket license by submitting a voluntary withdrawal, and The MLC can terminate the blanket license for an existing licensee if the DSP fails to comply with the statutory and regulatory terms applicable to blanket licensees. Since our last newsletter, no DSPs have voluntarily withdrawn their blanket license, nor has The MLC terminated any blanket licenses.

You can find more information by searching for each DSP’s Notice of License here.