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MLC calls on digital services to sign up to its new blanket licence

By | Published on Monday 21 December 2020


The all-new US collecting society the MLC has confirmed that the new blanket licence for digital services covering mechanical rights in songs, which it has been set up to administrate, will become available at the start of next month. Existing digital platforms wishing to utilise the new licence should submit a ‘notice of licence’ no later than 15 Feb.

The MLC was set up as a result of the US Music Modernization Act, which made changes to the way mechanical rights are licensed to digital services Stateside.

It basically brings the US in line with much of the rest of the world, where there is a collecting society that can provide a blanket and/or mop-up licence for streaming services to allow them to legally exploit the mechanical rights in songs on their platforms that are not otherwise covered by a licence from another collecting society or music publisher.

Although there is a compulsory licence covering mechanical rights in the US, there wasn’t previously a collecting society empowered to issue a blanket licence which would then take responsibility for getting everyone paid. Instead, each licensee had to send a notice of intent to each individual rights owner to activate the compulsory licence.

This was a challenge for streaming services that had tens of millions of recordings on their systems from launch. Not least because the services didn’t even know what specific songs were contained in those tens of millions of tracks, because the labels and distributors that provide the recordings didn’t tell them.

That system led to many songs not being properly licensed, which led to many streaming services being sued for copyright infringement. The new system should overcome those problems. Though it doesn’t necessarily mean everyone gets paid. The new system is better than the old system, but still relies on the new MLC working out who it needs to pass royalties on to. Its counterparts in other countries have had mixed results in tackling that challenge.

For now, though, the MLC’s top priority is making sure all the digital service providers – or DSPs – are aware of its new licence and how to access it. And also that there are other obligations for digital services under the MMA which apply even if they chose not to sign up for the MLC licence.

“The MLC has engaged with more than 50 DSPs so far”, the society’s boss Kris Ahrend said on Friday. “Both to make sure they [are] aware of their new legal responsibilities and to preview the resources we’ve created for them, including reporting specifications and the templates for notices to the MLC. These resources are all on the MLC’s website, and our DSP Relations Team is available to answer any questions about them that DSPs might have. All of this should ensure that currently-operating DSPs are in a position to begin operating under the new blanket license starting on 1 Jan 2021”.

As for the obligations that even apply to those DSPs who don’t utilise the new MLC licence, the society explains: “By US law, DSPs that provide more than 5000 unique works to US consumers via interactive streaming or downloads on any given day in a given month – or earn more than $50,000 a month, or $500,000 over twelve months, from such activities – must report their usage data to the MLC, whether or not they choose to obtain the new blanket licence”.