On February 16, the Mechanical Licensing Collective (MLC) – a nonprofit organization designated by the U.S. Copyright Office to administer blanket mechanical licenses to eligible streaming and download services in the United States –announced that it had received a total of $424.4 million in unmatched royalties accrued by 20 digital service providers (DSPs), including Spotify and Apple Music, during a three-year transition period under the terms of the Music Modernization Act (MMA). The transfer of unmatched royalties enables these DSPs to qualify for limited liability provisions under the MMA. At the same time, usage data submitted by DSPs associated with the accrued unmatched royalties is expected to help the MLC identify copyright owners for distributing royalty payments, the first of which are expected to be distributed this April…
The greatest amounts of unmatched royalties transferred to the MLC came from Apple Music ($163.3 million) and Spotify ($152.2 million), both well ahead of Amazon Music ($42.7 million) and Google Play Music/Youtube ($32.9 million). The unmatched royalties transferred to the MLC largely tracks monthly U.S. user base statistics for streaming music providers, as Apple Music and Spotify top the monthly user base rankings as well. However, it does suggest that companies like Pandora, which ranks third in user base but only had $12.4 million in unmatched royalties, do a better job of locating copyright owners for distributing royalties than companies like Amazon, which ranked fifth in September 2019, with 16.5 million monthly users, but transferred nearly three times the amount of unmatched royalties to the MLC as Pandora.
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