On July 5th, Digital Music News first revealed that the U.S. Copyright Office had chosen the winning bid to run the Mechanical Licensing Collective (MLC).
The winner — perhaps unsurprisingly — was the ‘industry consensus’ coalition led by major music publishers like Universal Music Publishing Group and Sony/ATV. That group was the favored pick, though the heavyweight coalition was assailed by rival American Mechanical Licensing Collective (AMLC) as harboring numerous conflicts of interest.
According to the AMLC, major publishers are planning to exploit their MLC stewardship to claim billions in streaming royalties that belonged to smaller songwriters and publishers. That would be facilitated by aspects of the recently-signed Music Modernization Act (MMA), which allows for the rapid payment of unclaimed royalties to the largest publishers based on market share — even if the money was accrued on catalogs they don’t own.
Now, the AMLC is softening its tone a bit — but only slightly.
In a statement emailed to Digital Music News, the AMLC offered its congratulations to the newly-minted ‘MLC, Inc.,’ while underscoring its previous concerns.
“We are pleased that the AMLC could bring into focus the potential impediments and inherent conflicts in the MMA to ensure all songwriters are paid the royalties they earned,” the brief statement reads. “We continue to offer the Copyright Office, the music services, DiMA, and the designated MLC our support and help to achieve this end.”
That suggests that the AMLC will continue to remain a thorn in the side of major publishers, in particular figures like David Israelite, CEO of the National Music Publishers’ Association (NMPA), and Bart Herbison, executive director of the Nashville Songwriters Association International (NSAI). Both were reportedly sparring aggressively with AMLC members ahead of the U.S. Copyright Office’s decision.
In a separate conversation, AMLC member Jeff Price admitted that the major music publishers simply outmatched his organization.
“The Register of Copyrights [Karyn A. Temple] did a good job, the [U.S. Copyright Office] met with us and heard us out, and royalty issues are now in the forefront,” Price told DMN. “I applaud their efforts.”
Price noted that the NMPA and its constituents had some serious lobbying muscle to influence legislators.
“The NMPA is a very talented trade and lobbyist organization that has millions of dollars to hire lobbyists to the benefit of its minority constituency,” Price continued. “I wish we had a level playing field, but we didn’t, and we did the best that we could do.”
Price declined to answer whether any of those ‘millions’ went to directly (or not-so-directly) into the coffers of the decision-makers in question. But hey, this is America — so you can answer that one for yourself.
Also opposing the major publishers in the fight for control over the MLC was the Songwriters Guild of America, or SGA. And this group is outright promising to create continued headaches for major publishers as the MLC is formed.
The SGA, led by legendary songwriter Rick Carnes, noted that the defeat carried some important victories. “The Copyright Office made clear, as requested by SGA in recently filed comments, that it intends to take an active role in reviewing the activities of the MLC in light of the potential conflicts of interest inherent within a board of directors that will include major music publisher representatives,” the organization told DMN in a statement.
Carnes made it very clear that his boxing gloves remain on.
In reference to a system that funnels unclaimed royalties to publishers based on market share after a short window, Carnes expressed serious frustration.
“Obviously, under such circumstances you need an independent, outside overseer to make sure that those potentially conflicted board members who would benefit from the MLC doing a lax job in identifying the proper copyright owners do not utilize their positions to pursue unjust enrichment of their companies, despite the best efforts of songwriters, composers and truly independent music publishers on the board to achieve equitable results,” the songwriter noted.
Carnes promised to watch the issue of unclaimed royalty redistribution diligently. He also noted that the SGA was considering a challenge of an MMA statute that blocks copyright infringement lawsuits against streaming platforms like Spotify. That statute holds that infringement lawsuits cannot be filed after the (now past) date of January 1st, 2018.
“SGA and the entire, independent music creator community have our work cut out for us,” Carnes continued. “But we are fully prepared to do whatever is prudent to protect the rights and interests of songwriters and composers and look forward to working closely with the US Copyright Office and the entire music creator community in doing so.”