Mechanical Licensing Collective (MLC): How to License and Claim Royalty

 

The Mechanical Licensing Collective (MLC) is a nonprofit organization established under the Music Modernization Act of 2018. It administers the blanket mechanical license for streaming and downloads in the U.S., paying mechanical royalties to songwriters and publishers. The MLC currently holds a significant pool of unmatched mechanical royalties for musical works that have not been properly registered, often referred to as "black box" royalties.

Understanding the Mechanical Licensing Collective (MLC)

 

What is the MLC?

The Mechanical Licensing Collective, or MLC, is a U.S. nonprofit organization responsible for collecting and distributing digital audio mechanical royalties. It was created by the Music Modernization Act to ensure songwriters and music publishers receive their due compensation from digital service providers, like Spotify and Apple Music, for the use of their musical works. The MLC’s primary function is to administer the blanket mechanical license required for streaming and permanent downloads in the U.S. This means that digital service providers (DSPs) can acquire a single license to cover all musical works they make available, simplifying the process for both the platforms and copyright holders.

How the MLC Administers Mechanical Licenses

The MLC administers mechanical licenses by collecting digital audio mechanical royalties from streaming services and other digital platforms. It then matches these royalties to the correct musical works and pays the collected funds to the registered songwriters and publishers. This streamlined process aims to reduce the complexities of mechanical royalty collection in the digital age. The organization's responsibility includes receiving usage data from DSPs, identifying the musical works involved, and ensuring that all generated royalties are accurately attributed and distributed. This system helps to ensure that self-administered songwriters and traditional music publishers can efficiently collect mechanical royalties from U.S. streaming.

Importance of Mechanical Royalties for Songwriters

Mechanical royalties are a crucial income stream for songwriters, representing compensation for the reproduction of their musical works. For every stream or download of a song in the U.S., a mechanical royalty is generated, distinct from performance royalties. These earnings can significantly contribute to a songwriter's overall financial well-being. Many independent songwriters, however, often overlook or misunderstand how to effectively collect mechanical royalties. Proper registration with the MLC ensures that you receive your share of these digital mechanical royalties, preventing your earnings from ending up in the unmatched "black box" funds.

Registering Your Works with the MLC

 

Steps to Register with the MLC

To ensure you collect mechanical royalties, you need to register with the MLC. The first step is to become a member of the MLC by creating an account on their portal. This involves providing your personal and banking information, as well as details about your role as a songwriter, composer, or lyricist. Once your account is set up, you can proceed to register your musical works. This involves submitting detailed information for each song, including its title, all associated songwriters and publishers, ownership splits, and unique identifiers like ISWC codes if available. Accurate and complete registration is key to matching your songs with the MLC's royalty distributions.

Benefits of Registration for Independent Songwriters

Registering your songs with the MLC offers significant benefits, particularly for independent songwriters. It ensures that you are eligible to receive mechanical royalties from streaming and downloads in the U.S., direct from the source. Without proper registration, your share of these royalties could remain unclaimed. Beyond current distributions, registration allows you to claim any historical unmatched mechanical royalties associated with your musical works. The MLC actively works to match these funds, and having your works registered increases the likelihood of recovering money that may have been generated before your registration.

Common Mistakes When Registering

A common mistake during MLC registration is incomplete or inaccurate data submission. Missing songwriter splits, incorrect song titles, or failure to list all contributing parties can lead to delays in matching and payment. It is crucial to double-check all information before submitting your musical works. Another frequent error is confusing mechanical royalties with performance royalties, which are collected by performance rights organizations (PROs) like ASCAP or BMI. While both are vital, the MLC is specifically responsible for digital mechanical royalties, so ensuring your works are registered with both entities is essential for comprehensive royalty collection.

Claiming Your Unmatched Royalties

 

Understanding Black-Box Royalties

Many independent songwriters discover they have unclaimed funds sitting in what are commonly called "black-box" accounts. These are digital audio mechanical royalties that the Mechanical Licensing Collective (MLC) has collected from digital service providers (DSPs) but has not been able to match to the correct musical works and copyright holders. This often happens because the works were never properly registered with the MLC, or the registration information was incomplete or inaccurate. The MLC is a nonprofit organization that is responsible for collecting these mechanical royalties from streaming services and other digital platforms. When the MLC collects U.S. mechanical royalties generated from streams and downloads, it attempts to match them to registered works. If a match cannot be made due to missing or incorrect data, these funds accumulate in the unmatched royalties pool, awaiting proper identification and claim.

How to Claim Your Royalties

To claim any digital audio mechanical royalties that might be waiting for you, the first step is to ensure all your musical works are properly registered with the MLC. Once you become a member of the MLC and have your songs registered, the MLC can begin the process of matching your works to the unclaimed funds. This can also involve providing additional documentation to prove your ownership of the musical work. The MLC has a public search portal where you can look for unmatched works. If you find your work listed, you can initiate a claim through your MLC account, providing all necessary details and documentation. This proactive approach helps ensure that mechanical royalties generated from your streams and downloads are directed to you rather than remaining in the unmatched pool.

Why Many Songwriters Have Unclaimed Money

A significant reason many songwriters, especially independent ones, have unclaimed mechanical royalties is a lack of awareness or understanding of the complex system. Historically, collecting mechanical royalties for digital uses was fragmented, and many self-administered songwriters simply didn't know they needed to register their songs with a separate entity beyond their performance rights organization. Another common factor is the sheer volume of new music being released daily and the challenges in accurately identifying and registering every musical work across all digital platforms. Inconsistent data from digital service providers, coupled with incomplete or delayed registration by songwriters and publishers, contributes to the accumulation of these unclaimed funds with the Mechanical Licensing Collective.

Global Considerations for Songwriters

 

Limitations of the MLC's Coverage

It is important to understand that the Mechanical Licensing Collective (MLC) only collects U.S. mechanical royalties. The MLC's mandate, established by the Music Modernization Act of 2018, is specifically for the administration of the blanket mechanical license for digital audio mechanical royalties generated from streaming and downloads within the United States. This means that if your music is streamed or downloaded outside the U.S., the MLC does not collect those mechanical royalties. For musical works consumed internationally, a different set of collecting societies and systems are responsible for administering mechanical licenses and collecting royalties. Each country or territory typically has its own mechanical rights organization or a combined performance and mechanical rights organization. Therefore, solely registering with the MLC will not ensure worldwide collection of your mechanical royalties.

The Role of Publishing Administrators

Given the MLC's U.S.-centric focus, a publishing administrator becomes crucial for any songwriter whose music is consumed globally. A publishing administrator, like UniteSync, helps collect mechanical royalties from all territories where your music is played. They register your musical works with collecting societies around the world, ensuring that you receive all due earnings. These administrators handle the complex process of registering songs with numerous international collecting societies, tracking usage, and collecting the various types of royalties generated, including both mechanical and performance royalties. This service is particularly valuable for independent songwriters who may not have the resources or expertise to navigate the diverse global landscape of music licensing and royalty collection.

How to Manage Worldwide Licensing

To effectively manage worldwide licensing and ensure you collect mechanical royalties from every stream and download globally, you need a comprehensive strategy. This involves not only registering with the MLC for U.S. mechanical royalties but also engaging with a global publishing administrator to manage your rights in other territories. A publishing administrator will handle registering your songs with the appropriate societies in Europe, Latin America, Asia, and other regions. They will also manage the intricate data requirements, such as ISWC codes and detailed ownership splits, necessary for accurate royalty collection from streaming services and other digital platforms worldwide. This approach ensures that you maximize your royalty income from all sources, rather than leaving international digital audio mechanical royalties unclaimed in various global "black box" accounts.

Working with UniteSync

 

How UniteSync Can Help

UniteSync helps independent music creators collect digital audio mechanical royalties that might otherwise go unclaimed. Many musical works are not properly registered with collecting societies worldwide, leading to lost earnings for songwriters. We address this issue by globally registering your songs. UniteSync ensures that you receive the mechanical royalties you are owed from streaming services like Spotify and other digital platforms across more than 100 countries. We simplify the complex process of royalty collection, empowering self-administered songwriters to recover their due earnings. Our service provides a transparent dashboard for you to track your payouts and helps identify royalties you may not even know exist.

Understanding Fees and Rights

UniteSync operates on a flexible 28-day rolling contract, allowing you to maintain control over your musical works without long-term commitments. We offer an 80% royalty share to you, the music creator, charging a 20% commission for our services. You retain 100% of your copyright and all other rights to your songs. We also offer a free audit for music creators to identify potential unclaimed mechanical royalties. Nothing is charged until money is actually recovered and distributed to you. This ensures that our success is directly tied to yours in collecting all due digital audio mechanical royalties.

Success Stories of Recovery

We have successfully distributed mechanical royalties to numerous songwriters, helping them recover earnings from various global sources. For example, one independent songwriter recovered two years of previously unclaimed streaming royalties from continental European societies after registering their catalog with us. Another composer, who had primarily focused on U.S. performance royalties, discovered significant digital audio mechanical royalties generated in Asia that they were unaware of. Through UniteSync, these funds were identified, matched, and paid out. These examples highlight how proper registration and global administration can uncover substantial earnings for independent songwriters.

Frequently Asked Questions

 

What types of works are covered by the MLC?

The Mechanical Licensing Collective (MLC) primarily covers musical works for digital audio mechanical royalties generated in the U.S. This includes streams and permanent digital downloads on platforms like Spotify and Apple Music. The MLC collects and distributes these mechanical royalties to songwriters and music publishers. The MLC’s scope is specific to the reproduction and distribution of musical works in digital formats within the United States. It does not cover performance royalties, which are handled by Performance Rights Organizations (PROs) like ASCAP or BMI, nor does it cover mechanical royalties generated outside the U.S.

How do I know if I have unclaimed royalties?

Many independent songwriters have unclaimed mechanical royalties with the MLC due to unregistered or improperly registered musical works. The MLC maintains a public search portal where you can look for unmatched works. You can also review your own registration details to ensure all your songs are accurately listed with the MLC and other collecting societies. If you suspect you have unclaimed digital audio mechanical royalties, a comprehensive audit of your catalog against society databases is a good first step. UniteSync can perform this audit automatically when you connect your Spotify account, helping identify any musical works that may be generating income but haven't been properly claimed.

What should I do if I encounter issues during registration?

If you encounter issues while trying to register your musical works directly with the MLC or any other collecting society, first double-check all the information you are providing. Common problems include incorrect ownership splits, missing co-writer details, or typographical errors in song titles. Ensure you have all necessary identifiers, such as ISWC codes, if applicable. If the problem persists, reach out to the MLC’s support team for assistance. They can provide guidance on specific registration hurdles. Alternatively, a publishing administrator like UniteSync can handle the entire registration process for your musical works, ensuring accuracy and completeness across all relevant collecting societies worldwide.