Copyright Office Renews MLC's Mandate as Royalties Near $4 Billion
The US Register of Copyrights has renewed The Mechanical Licensing Collective's (MLC) designation as the statutory collective for administering blanket compulsory mechanical licenses for streaming and download services in the US. Since its operations began in January 2021, The MLC has distributed nearly $4 billion in royalties to songwriters and music publishers. The decision follows a required periodic review and validates The MLC's adherence to the Music Modernization Act.
Key Takeaways
- The MLC's designation as the statutory mechanical licensing collective was continued by the US Register of Copyrights after a mandatory periodic review.
- Since January 2021, The MLC has processed close to $4 billion in royalties for songwriters and music publishers.
- The collective has enrolled nearly 90,000 members and built a song ownership database with over 54 million songs.
- The MLC is engaged in ongoing legal disputes with Spotify over mechanical royalty rates for "bundled" services and with Pandora regarding its ad-supported radio tier's interactive classification.
- The next periodic review for The MLC's designation is scheduled for January 2029.
Why It Matters
The continued designation of The MLC provides stability to the mechanical licensing framework, ensuring consistent royalty administration for music rights holders in the streaming era. This enables continued enforcement of royalty obligations from digital music services. The ongoing disputes with major platforms like Spotify and Pandora highlight persistent friction points between rights holders and digital services over royalty calculations. The outcomes of these cases will set precedents for how bundled services and ad-supported tiers are valued for mechanical royalty payments, influencing revenue streams across the music streaming ecosystem.
Additional Context
The MLC's lawsuit against Spotify, filed in May 2024, centers on Spotify's reclassification of its Premium subscription tiers as "bundles" after adding audiobook access. The MLC alleges that Spotify unilaterally reduced the 'Service Provider Revenue' reported for Premium by nearly 50%, thereby underpaying mechanical royalties (The MLC complaint, May 2024). Spotify maintains that Premium qualifies as a bundle, offering both music streaming and 15 hours of audiobooks for a single fee, and that the audiobooks component holds substantial value, contrary to The MLC's claims of "token value" (Spotify pre-motion letter, July 2024). This dispute revolves around the interpretation of Section 115 of the Copyright Act and its regulations concerning bundled offerings. The MLC's original claims were dismissed in January 2025, but the collective was granted permission to file an amended complaint, continuing the legal battle. Spotify also introduced new "Basic" plans in June 2024, which are identical to Premium but exclude audiobooks, costing $1 to $3 less per month. This move appears to further delineate its offerings in response to the ongoing royalty debate.
Read full article at musicbusinessworldwide.com
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