Copyright Office Weighs Potential Renewal for Digital Music Royalty Entity

The Copyright Office (CO) last week gathered feedback from broadcasters, streamers and songwriters on the potential redesignation of the entity that administers digital streaming royalties under the Music Modernization Act (MMA) (see 2208150042). President Donald Trump signed the MMA into law in October 2018, establishing the mechanical licensing collective (MLC). The MMA -- a years-long negotiation and legislative compromise among music industry, broadcast and streaming entities -- modernized the royalty payment system for the digital era. The MMA requires the CO to review the MLC’s designation every five years. The first review began in January, and reply comments are due June 28. The MIC Coalition, which includes NAB, CTA, the Computer & Communications Industry Association and the Digital Media Association, didn’t take a position on the MLC’s redesignation. But the coalition recommended the CO require the MLC to incorporate performance rights organization data into the musical works database to help members more efficiently handle payments. The MLC’s current database lacks comprehensive information for all four performing rights organizations, they said. The National Music Publishers’ Association and Nashville Songwriters Association International (NSAI), organizations that hold MLC board seats, recommended renewal. NMPA said it opposes proposals that "erode the proper functioning or funding of the MLC as explicitly laid out in the statutory text.” The MLC has “succeeded in fulfilling all of its obligations with the lowest operating budget of any known license administration collective in the music publishing industry,” said NMPA. The MLC’s operating costs, as a percentage of royalties it processes, was 3% in 2023, it said. Collective management and performing rights organizations typically take a 10%-20% commission, NMPA said. NSAI acknowledged there are areas for improvement but said the MLC has “exceeded everyone’s expectations in its first four years of operation. It is efficiently and effectively licensing, collecting and distributing royalties in a way our industry has not seen before.” Songwriters of North America said the existing MLC should be renewed, but the organization needs to address issues with the transfer and accuracy of the database.