Let the Games Begin: Dueling MLC Submissions Filed With the U.S. Copyright Office

James Madison Memorial Building in Washington, DC, which houses the Library of Congress and U.S. Copyright Office (photo: UpstateNYer CC 3.0)

Competing submissions for the Music Modernization Act’s MLC were officially filed with the U.S. Copyright Office on Thursday night.

Talk to National Music Publishers’ Association (NMPA) president David Israelite, and he’ll tell you this shouldn’t be a contest.

But the NMPA, which represents major publishers like Sony/ATV, Warner/Chappell, and Universal Music Publishing Group, is now looking at a serious face-off to lead the Mechanical Licensing Collective, or MLC, which is mandated by the recently-passed Music Modernization Act.

On Thursday evening, the U.S. Copyright Office received two bids to run the MLC.

The first group, which simply titles itself the ‘MLC,’ is led by the aforementioned NMPA, major publishers, and a number of larger indie publishers.  It also has heavy endorsement from non-publishing groups, including the RIAA.

The American Mechanical Licensing Collective, or AMLC, is backed by a consortium of indie publishers, music technologists, and decidedly non-major publishers.

Also in the stack is a lone application for a ‘Digital Licensee Coordinator,’ or DLC, which will represent licensees like Spotify, Apple Music, Tidal, YouTube Music, and other streaming platforms in the mechanical payment process.

That application was filed by DiMA, or the Digital Media Association, a trade group largely focused on digital streaming, media, and tech-related interests.  According to early information gleaned by Digital Music News, the DLC will focus on issues like the costs of running the MLC.

At this point, DiMA itself has yet to endorse a specific MLC contender.  But that might be a bit premature.  According to the U.S. Copyright Office timetable, the Thursday night filings start the clock on a 30-day review process, one that invites comments from various industry stakeholders.

“Input here will carry weight.”

If that process is anything like the commenting window held by the Federal Communications Commission (FCC) over net neutrality, then real debate will be virtually impossible.  The FCC itself has admitted that its net neutrality commenting period was flooded by outside operatives and fake names, mostly likely from Russia.

At present, it’s unclear if the MMA commenting period will draw the same circus of disinformation (though hey, anything’s possible in Washington these days).

So far, the discourse appears civil.

As of this writing, there are 11 comments, with more expected to trickle in.  Jeff Price, an AMLC board member and ardent campaigner, has urged the industry to weigh in.

“Many organizations, lawyers, songwriters, etc., are going to make [comments] to influence the Copyright Office’s designation,” Price told Digital Music News.

“I strongly urge all songwriters to please make comments on the applications.  Input here will carry weight.”

The place to make comments with the Copyright Office is here.

Price has raised serious questions about the ‘conflict of interest the NMPA version of the MLC contains,’ noting that mega-publishers like Warner/Chappell are merely using the MLC to collect funds on rights they don’t own.  Price, and other AMLC founders, note that major publishers already have direct licensing deals with platforms like Spotify, so they won’t actually be using the MLC.

In a town hall meeting held earlier this month in Los Angeles, AMLC board member John Barker of ClearBox Rights noted that between $900 million and $2.5 billion in unmatched mechanical licenses will be immediately processed by the designated MLC group within the first year.  During that ‘short fuse’ period, most of the funds will be distributed to the major publishing groups based on market share, even though these groups have already been paid on their direct deals.

“My issue is that the largest amount of money — an [estimated] billion dollars that’s been collecting, is the messiest data out there because it’s ten or [more] years old.  But it has the shortest fuse; it’s going to be paid out in one year.”

“The law says — it will get paid by market share, and the majors obviously have a double-digit percentage of that market share.”

“But a majority of that money probably belongs to everybody else — the people that didn’t know they needed to register, the guy with 1-10 songs. My guess is the largest amount of money is that.”

Neither Israelite nor any major publishing executives have commented on that issue.

In fact, the self-titled MLC has been fairly quiet throughout the process.  By sharp contrast, Price has been pounding his fist on the ‘glaring conflict of interest’ presented by big publishers.  “I’m against a board member benefitting by not paying somebody what they’re supposed to pay,” Price declared.

“I don’t think a board member should be specifically benefiting through inefficiency, that’s just an inherent conflict of interest.”

“It’s glaring, but it’s also what’s been happening around the world for the past 80 years.  Black boxes should not be acceptable.  It shouldn’t be ‘that’s okay, let’s liquidate the money,’ it should be, ‘what can we do to eliminate them?'”