Clockwise from top-left: Daryl Friedman, Kris Ahrend, Tayla Parx
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5 Key Quotes From The Mechanical Licensing Collective Webinar

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With the forthcoming changes to the digital mechanical royalties landscape happening in 2021, the Recording Academy hosted a special webinar to explain how the MLC will benefit creators
John Ochoa
Advocacy
Nov 12, 2020 - 1:57 pm

Once 2021 rolls in, creators and songwriters in the U.S. will face a new and improved playing field when it comes to digital mechanical royalties. That's all thanks to the Mechanical Licensing Collective (MLC), a new entity that will administer a new blanket mechanical license for streaming and download services starting Jan. 1, 2021. 

Established under the game-changing Music Modernization Act (MMA), which President Trump signed into law in 2018, the MLC will administer a more efficient payment system that will better identify, match and distribute unclaimed songwriter and publisher royalties and, with the help of the Recording Academy and the U.S. Copyright Office, will assist in songwriter outreach. This all means creators will get paid what they are rightfully owed in a fairly and timely manner under the new MLC system.

To address questions about how it will work, the Academy's Advocacy team hosted a special webinar this week (Nov. 9) to explain exactly what the MLC is—and what it's not—and how it'll benefit creators across the globe. 

Moderated by the Recording Academy's Chief Advocacy Officer Daryl Friedman, with opening remarks from Recording Academy Chair and Interim President/CEO Harvey Mason jr., the webinar invited MLC CEO Kris Ahrend to dive deep into the mechanics behind the forthcoming opportunities and benefits under the MLC. Special guest Tayla Parx, the celebrated songwriter and GRAMMY nominee ("Thank U, Next," "High Hopes" and "Love Lies"), also joined the conversation to offer her real-life experiences and advice to the Recording Academy members who attended the webinar. 

To recap the informative conversation, here are five key quotes from Advocacy's Mechanical Licensing Collective webinar.

Recording Academy's Chief Advocacy Officer Daryl Friedman (L) and MLC CEO Kris Ahrend (R)

Recording Academy's Chief Advocacy Officer Daryl Friedman (L) and MLC CEO Kris Ahrend (R)

"We live in a global world where music does not remain within boundaries."

First things first: As noted on its website, the MLC will only "issue and administer blanket mechanical licenses for eligible streaming and download services (digital service providers or DSPs) in the United States." That means if you're a creator based in the U.S. and one of your songs gets streamed on Spotify in Japan or sold on Amazon Music in the U.K., the MLC will not administer licenses covering ex-U.S. uses of any kind. 

However, the MLC will indeed benefit international creators. 

"We collect and distribute those digital audio mechanicals that are paid pursuant to that new blanket license," Ahrend explained. "And then here's the key: We pay the person entitled to receive those mechanicals wherever in the world they are. While the blanket license is only available to digital services for their U.S. operations, as all of you know, we live in a global world where music does not remain within boundaries."

"Don't assume the MLC replaces any existing organization that pays you."

While the above example sounds easy enough, the breakdown of the different types of licensing and synchronization rights and publishing and mechanical royalties available across the wider music business can often feel overwhelming. That's why it's very important to understand what the MLC does and does not do.

Simply put, the MLC will focus exclusively on digital mechanical royalties. It will not administer performance royalties for songwriters, digital performance royalties for sound recording owners and performers, licenses covering audiovisual uses (syncs) or mechanical licenses for physical products. To cover all of these different types of income sources, creators should continue to work with their respective royalty agencies and performance rights organizations (PROs) like SoundExchange, Songtrust, ASCAP, BMI, SESAC, GMR and others.

Ultimately, Ahrend said, the MLC will be a complementary income source to the ccollective rights organizations and PROs you already have on your team: "All of those organizations exist because the way that the laws behind music are set up is complicated. But the most important takeaway, I think, for anyone watching is: Don't assume that the MLC replaces any existing organization that pays you," Ahrend said.

"If you're confused by this, you are in the vast majority."

Both Tayla Parx and the MLC's Ahrend will be the first to tell you that navigating the complex world of royalties, rights and syncs is not an easy task. 

"If you're confused by this, you are in the vast majority," Ahrend said. "This is not easy, and you should keep pushing to understand because it is important, it is worth it. It's your business, it's the thing that will hopefully enable you to continue to be a creator for the rest of your life. We want to try to simplify as much of it as we can, and certainly our piece."

Luckily for creators, the MLC will offer its forthcoming, user-friendly MLC Portal, which will allow creators to enter their data, check their data for accuracy and completeness, register new musical works and identify new sound recordings that feature their works, according to the MLC website.

Clockwise from top-left: Daryl Friedman, Kris Ahrend, Tayla Parx

Clockwise from top-left: Recording Academy's Chief Advocacy Officer Daryl Friedman, MLC CEO Kris Ahrend,  GRAMMY-nominated songwriter Tayla Parx

"The most important thing we value is our time."

From independent songwriters and creators to major publishing houses to music publishing rights companies like Songtrust, the MLC will service the entire U.S. music industry. 

Self-administered songwriters, composers, and lyricists will be able to easily navigate the MLC Portal on their own, but Ahrend also acknowledges the value of publishers and related agencies that can handle the data process and manage administrative royalty tasks on behalf of creators.

"We have designed everything we're doing to be as user-friendly as possible such that you can do this with us if you choose. But that said, there are a myriad of companies out there that offer really valuable services," Ahrend said. 

"At some point in your career, and this is true of all of us in life, the most important thing we value is our time," he continued. "So when you think about whether you can do this yourself, it's really a question of time. Is that time that you have and want to spend doing it?"

Adds Parx, "It's all about how much time you feel like you're willing to take away from it, and that goes down to how much you value your time in the studio or being creative. But I like that it gives you an option."

"You matter, and we want to make sure that you get paid properly."

While many artists operate independently or with small teams, creators of all sizes and scope will be able to benefit from the new MLC payment system, so long as you're registered with the MLC Portal. Sure, unlocking the world of royalties is no easy task. But the MLC is here to help everyone, from independent creators to publishing corporations across the U.S., no matter the size of your team. 

Regardless of your setup, Ahrend highly recommends that all self-administered songwriters "in any respect," meaning "for any of your works," join the MLC to ensure the organization can administer the mechanicals you're owed on all the works you administer for yourself. 

"We are here. We will deal with you in the same way that we deal with the largest publishers, the largest CMOs outside the U.S., the largest administrators," Ahrend said of self-administered creators. "You matter, and we want to make sure that you get paid properly."

Missed the program or want to watch it again? View the full webinar on the Recording Academy's Facebook page.

Mechanical Licensing Collective Webinar: 5 Things To Know About The MLC

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Mechanical Licensing Collective Webinar: 5 Things To Know About The MLC

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Ahead of the Mechanical Licensing Collective Webinar next week, we've put together a helpful list of the five things you need to know about the MLC
John Ochoa
Advocacy
Nov 6, 2020 - 2:31 pm

At the top of 2021, creators across the nationwide music community will begin to receive more accurate, timely and transparent royalty payments thanks to the Mechanical Licensing Collective (MLC), an entity in charge of administering a new blanket mechanical license for streaming and download services. Established under the groundbreaking Music Modernization Act (MMA), which celebrated its second anniversary in October, the MLC will collect mechanical royalties from the streaming services and distribute them to songwriters, composers, lyricists and music publishers.

The Recording Academy understands the importance of the MLC to creators and is here to help our members receive the songwriter royalties they are entitled to from digital streaming services. 

That's why we've put together a special webinar to address questions and concerns. Taking place Monday, Nov. 9, at 1 p.m. PT/3 p.m. CT/4 p.m. ET, Mechanical Licensing Collective CEO Kris Ahrend, hit songwriter and GRAMMY nominee Tayla Parx ("Thank U, Next," "High Hopes," "Love Lies"), producer/songwriter and Recording Academy Chair and Interim President/CEO Harvey Mason jr. and the Academy's Chief Advocacy Officer Daryl Friedman will engage in an informative conversation on the MLC. 

Attending Recording Academy members will also have the opportunity to submit questions to be answered by the expert panel. Submit your questions in advance and register for the webinar 

Ahead of the Mechanical Licensing Collective Webinar next week, we've put together a helpful list of the five things you need to know about the MLC.

How Was It Created?

Putting music creators first, the MLC is one of the most significant accomplishments of the MMA, the monumental bill signed into law by President Trump on Oct. 11, 2018. Since then, the MMA has ushered in a new era of fair compensation for music makers, with some of the bill's reforms already benefitting music creators.

The Recording Academy, with the help of its thousands of members, played an integral role in the creation and passage of the law.  

And the Recording Academy was instrumental in guiding the designation of the MLC, filing filed comments with the U.S. Copyright Office that called for additional information regarding accurate data matching and songwriter outreach to ensure every songwriter is properly paid for their work. 

The Copyright Office ultimately designated the Mechanical Licensing Collective, Inc. (MLCI)  as the overseeing entity managing the new blanket mechanical license and handling the royalty collection and distribution. 

In making the designation, the Copyright Office recognized the Recording Academy's helpful input throughout the decision-making process, commending the Academy's thorough analysis of both proposals and fairly recommending the best proposition to the Copyright Office. 

Who Leads the Collective?

Operating as a nonprofit, the MLC is funded by the major streaming services, including Spotify, Apple Music, Pandora and Amazon Music, among others, which collectively granted $62 million in startup capital to the collective. 

With a staff of 40, the MLC is led by CEO Kris Ahrend, a highly experienced music industry executive who'll spearhead the Recording Academy's MLC webinar next week. 

As a Creator, How Will I Benefit?

Starting January 1, 2021, the MLC will administer a more efficient system that will ensure that all creators will get paid fairly and timely. Under the MLC, the new payment system will better identify, match and distribute unclaimed songwriter and publisher royalties and, with the help of the Recording Academy and the Copyright Office, will assist in songwriter outreach to ensure all creators receive what they are rightfully owed. 

As the Library of Congress explains, the MLC will collect and distribute statutory mechanical royalties to copyright owners "when their work is streamed on interactive streaming services like Apple Music or Spotify, or sold on downloading services like Amazon Music." 

Music creators will need to register their songs with the MLC in order to get paid, while "any unclaimed royalties can start being paid to copyright owners and songwriters of matched works according to each work's market share," according to the Library of Congress. 

Learn more about how you can get paid via the forthcoming MLC system at the Recording Academy's Mechanical Licensing Collective Webinar next week. 

Where Do These Royalties Come From?

The official MLC website provides a very helpful visual breakdown of how their new process will work in an effective and transparent manner. 

Simply put, music streaming services operating under a blanket license from the MLC will be required to send monthly usage data files and the corresponding royalties to the MLC. 

The MLC will then compute the royalties due for each work based on the usage data, which reflects streaming and download figures, it receives from the streaming services. 

Important: In order to receive payments from the MLC, all music publishers and self-administered songwriters, composers, and lyricists will need to register with the MLC in order to access their data via the MLC Portal, your key to getting your royalties paid.

How To Get Ready?

Ahead of the MLC Portal rollout, the MLC has launched two initiatives, the Data Quality Initiative (DQI) and the Music Data Organization Form, to help creators "Play Your Part" and "organize and prepare their musical works' data" ahead of the launch of the portal, according to the MLC website. 

Music publishers, administrators, self-administered songwriters and foreign collective management organizations (CMOs) can participate in the DQI, which will "help streamline the comparison of large schedules of musical works." For self-administered songwriters, composers and lyricists, the Music Data Organization Form will help organize your musical works' data ahead of the MLC Portal rollout.

Learn more about how you can join the MLC and "Play Your Part" as we head into the new MLC era of royalty payments next year.

Attn. Songwriters: Recording Academy To Host Webinar On The MLC

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Photo: NEIL GODWIN/TOTAL GUITAR MAGAZINE/GETTY IMAGES

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Copyright Office Names Mechanical Licensing Collective

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Ahead of schedule, the U.S. Copyright Office chooses who will run the MLC and recognizes the Academy's helpful input through the selection process
Nate Hertweck
Advocacy
Jul 8, 2019 - 3:46 pm

The day after Independence Day saw a surprise from the U.S. Copyright Office. In accordance with the Music Modernization Act (MMA), the Office made its designation for the Mechanical Licensing Collective (MLC), choosing Mechanical Licensing Collective, Inc. (MLCI) to manage the new blanket mechanical license and handle royalty collection and distribution as established by the MMA. Under the statute, the designation was due on July 9.

The MLCI, the group submission led by led by the National Music Publishers Association (NMPA), the Nashville Songwriters Association International (NSAI) and the Songwriters of North America (SONA), ultimately prevailed over a competing proposal known as the American Music Licensing Collective (AMLC). In making the designation, the Copyright Office concludes that the "AMLC’s goals and principles are laudable, and its submission includes a number of ideas that should be given further consideration," but that ultimately "MLCI’s planning and organizational detail provide a more reliable basis for concluding that it will be able to meet the MLC’s administrative obligations." The MLC will begin issuing the new license in January 2021.

The 88-page Final Rule released by the Copyright Office also includes the designation for the Digital Licensing Coordinator (DLC), the entity that will represent the interests of the digital streaming services that use the new blanket license. Only one candidate, which includes representatives from Spotify, Amazon, Apple, Google, and Pandora, was submitted for consideration as the DLC.

Along with their ahead-of-schedule designation, the Copyright Office cited the Recording Academy's comments frequently in its Final Rule, noting how the Academy’s input informed its decision-making process. In the final analysis of the determination, the Copyright Office buttresses its conclusion by recognizing that “the Recording Academy, a rare organization to withhold endorsement until it was able to study each candidates' proposals, weighed in on the perceived capabilities of the two proposals, ultimately endorsing MLCI ‘upon careful consideration of both submissions.’ The Academy noted that MLCI’s 'submission embodies a thoughtful, meticulous, and comprehensive approach,' concluding that it was 'best equipped to satisfy' the duties of the MMA.”

The Copyright Office then followed the Academy’s lead, concluding that “[f]or somewhat similar reasons, the Copyright Office concludes that MLCI is better equipped to operationalize the many statutory functions required by the MMA.”

Earlier, the Final Rule notes the Academy’s specific interest in ensuring that the MLC conducts robust matching of song data with unclaimed funds, highlighting that the “Recording Academy urged the Register to seek further information on MLCI’s commitments to match works and on when such commitments may reasonably be exhausted.”

The Copyright Office affirms the preeminence of reliable data matching and the Final Rule details the commitments and assurances provided by the MLCI to accomplish that goal. The Office also establishes its interpretation of the MMA that unclaimed accrued royalties may be held beyond the statutory holding period until such funds are matched to the appropriate owners. Accordingly, unclaimed royalties can be released and distributed by the MLC no sooner than January 2023, but they can also be held longer to facilitate continued matching.

The Office also calls out the importance of a game plan for outreach from the MLC to make sure that every songwriter is fully informed about the new entity and its importance. Outreach to the songwriter community was also a key issue in the Academy's recommendations.

"The Recording Academy asserts that 'without an effective outreach program, the Collective will not succeed,'" the rule reads. "While noting that both proposals contain information regarding public outreach, the Recording Academy suggests that both are insufficiently detailed with respect to clear and executable plans, and how each will measure the effectiveness of outreach. The Office questioned each candidate about specific plans and metrics in subsequent meetings."

Ultimately, the Copyright Office was satisfied by the answers provided by MLCI in response to the questions the Academy put forward for consideration. Recording Academy chief industry government and member relations officer Daryl Friedman thanked those involved in the decision making for considering the Academy's stance and input. "The Recording Academy congratulates the MLC, Inc. on its selection to run the new Collective, and thanks the Copyright Office for its diligence in its selection process that reflects attentiveness to the Academy’s comments," Friedman said. "The Academy now looks forward to utilizing its Chapters and thousands of members to assist the MLC in songwriter outreach to ensure the Collective’s success."

The MLC's success is important for everyone in the music community, but especially the songwriters who deserve fair, transparent compensation for their work. With the MLCI now primed to take over this significant role in implementing the MMA, the Academy stands ready to continue to leverage its community of music creators to support building a better system for all.

7 Ways To Support Music Creators On The 4th Of July
 

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Sunshine On A Grain-y Day: 5 Things Creators Can Be Thankful For During This Difficult Thanksgiving

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As we approach Thanksgiving, here are five things music makers can be thankful for during this difficult year
Advocacy
Nov 23, 2020 - 4:51 pm

During this holiday season, music creators are not looking for a gift, they are in need of an economic lifeline. The COVID-19 pandemic impacted the music community swiftly and has continued to limit creators’ access to traditional sources of revenue.

While this is a holiday season unlike every before, there is much to be grateful for but also much work left to do. With support from our members, the Recording Academy continues to lobby Congress for the inclusion of essential financial relief and key creative protections in any end of year COVID relief package. Here are five things music makers can be thankful for during this difficult year:

1. COVID-19 Relief: Tur-Key To Helping Music Creators Survive

When the pandemic started, Congress acted quickly to provide necessary aid to the entire music ecosystem. The $2 trillion CARES Act relief package contained a number of key provisions to help music makers survive the initial impact of the pandemic, including a new pandemic unemployment assistance program for eligible self-employed workers, new small business loan programs, and a $75 million supplemental fund for the National Endowment for the Arts (NEA), among others.

But these programs were only temporary—many have expired, or will expire by the end of the end of the year-- leaving millions of creators with growing financial strain and without essential lifelines. From saving our stages to fixing our unemployment system for gig workers, Congress must pass another relief package to aid creators and to help ensure that music plays on after the lockdowns are lifted.

2. Mechanical Licensing Collective: Helping You Collect A Helping Of Royalties

Part of the Music Modernization Act (MMA), the Mechanical Licensing Collective (MLC) was established as the new entity tasked with administering blanket mechanical licenses, collecting mechanical royalties from digital streaming services, and distributing those collected royalties to the right songwriters, publishers, composers, and lyricists.

The MLC will officially start collecting royalties on January 1, 2021, and distributing those royalties to songwriters and publishers in the months following. For more information on how the MLC works for creators, watch the Academy’s webinar with Kris Ahrend, CEO of the MLC.

3. HITS Act: Incentivizing Music Makers To Corn-tinue Creating Records

The Help Independent Tracks Succeed (HITS) Act will jumpstart the creation of great new music by incentivizing creators to safely re-enter the studio. Designed with independent music makers in mind, the bipartisan HITS Act would allow artists and producers to deduct 100% of their production expenses in the year such expenses are incurred, a departure from the current policy requiring production expenses to be amortized over the economic life of a sound recording.

The HITS Act was introduced in the House of Representatives by Reps. Linda Sanchez (D-Calif.) and Ron Estes (R-Kan.) on July 30, 2020. Let’s hope the HITS Act will be passed into law in order to help support independent records during the pandemic.

4. DMCA Reform: Combatting Online Pie-racy

The Digital Millennium Copyright Act (DMCA) was created to increase innovation and combat bad actors online. Since the bill’s passage in 1998, the internet has significantly evolved and the DMCA needs to be updated to reflect the current internet landscape. This year, Recording Academy Chair and Interim President/CEO Harvey Mason jr. and Yolanda Adams, a four-time GRAMMY winning singer/songwriter and co-chair of the Academy’s National Advocacy Committee, testified in support of DMCA reform before the Senate Judiciary Committee’s Subcommittee on Intellectual Property. Subcommittee Chairman Tillis (N.C.) has spent the past year listening to stakeholder groups and plans to issue draft legislative changes next month.

5. Recording Academy Members: Nothing Is Feast-ible Without You!

Throughout this difficult year, the Academy has continued to call on you, our members, to voice support for creator-friendly legislation, resulting in thousands of letters sent to Congress and hundreds of meetings with Congressional offices. Congress has been receptive to the needs of a struggling music ecosystem and our community will continue to push policymakers to stand firmly with music makers until we recover from the impact of the pandemic.

As you gather around the Thanksgiving table with your household, or share a virtual meal with family and friends from a far, send thanks to Congress for the aid they’ve given and urge them to give more assistance and protections to the music community in need.

Lastly, learn more about the issues impacting the creative community on the Academy’s Issues & Policy page and take action on the Act page.

Recording Academy And Music Community Coalitions Continue Advocacy For COVID-19 Relief

Josh Abbott (R) with Paul Wall (L) at the 2016 GRAMMYs On The Hill Awards

Josh Abbott (R) with Paul Wall (L) at the 2016 GRAMMYs On The Hill Awards

Photo: Paul Morigi/Getty Images for The Recording Academy

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Josh Abbott: It Is Time For Congress To Pass The HITS Act

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As the music ecosystem struggles to survive the impact of COVID-19, Josh Abbott calls on Congress to pass the HITS Act, ensuring that music plays on after the lockdowns are lifted
Advocacy
Nov 19, 2020 - 7:28 am

The fallout from the COVID-19 pandemic quickly altered the landscape of the music ecosystem. From canceled festivals to delayed tours, music-makers were left without access to their primary traditional income streams. Congress provided creators with some temporary lifelines at the start of the pandemic by passing the CARES Act. But as the pandemic continues, and with many CARES Act provisions expiring, Congress must provide additional financial relief for music creators. 

The Help Independent Tracks Succeed (HITS) Act, a bipartisan solution introduced by Representatives Linda Sánchez (D-Calif.) and Ron Estes (R-Kansas), would have a big impact getting independent artists back to work and back in the studio. The HITS Act allows an individual to fully expense the cost of new studio recordings on their taxes, up to $150,000. This small tax incentive would alter the current tax policy that requires individual recording artists and record producers to amortize production expenses for tax purposes over the economic life of a sound recording.

Josh Abbott, an Austin native and member of the Recording Academy, recently penned an opinion piece in the Austin American-Statesman in support of the HITS Act. As the leader of Texas-based country collective The Josh Abbott Band, Abbott is well aware of the tremendous impact the COVID-19 pandemic has had on the financial health of the entire music community. 

"The majority of music creators earn around 75% of their income through live shows and events, which are largely on hold due to the pandemic," Abbott writes. "This has been a difficult year for all of us, but it has been especially crippling to the financial well-being of musicians."

Abbott continues by stating how the HITS Act will enable struggling creators the ability to continue their careers during and after the pandemic, stating, "This bill provides financial support for musicians to stay in the studio now and create music for their next album and their next tour."

The cost of recording a new project still remains significant, especially in a year where many creators saw their typical income decrease. "Recording an album involves a whole host of expenses, including studio equipment, rental fees, staff costs, studio musicians and much more — costs that could easily run into the tens of thousands of dollars," Abbott states. "Under current law, music creators can write off these expenses, but it must be done in a gradual manner — usually over a 2-3 year period."

The HITS Act would allow independent creatives the opportunity to fully deduct production expenses in the year they occur, instead of amortizing production expenses over the full life of a sound recording. Currently, film and television productions already enjoy the ability to fully deduct production costs under the tax code. The HITS Act would provide tax parity for independent music creators and ensure that all corners of the creative industry are treated equally in the law. 

Abbott shared the profound impact this modest tax change would create for his immediate financial outlook. 

"In my case, I'm scheduled to record a new project album at Matchbox Studios in Austin. Studio costs will run $40,000, with another $10,000 on musicians. Being able to write off those expenses in full this year would save me thousands of dollars in taxes — freeing up money that could go toward a local studio and into the pockets of touring musicians who aren't touring. This is one small example of how the HITS Act will benefit musicians and the local economy."

Congress has the ability to positively impact the entire music ecosystem by passing the HITS Act, which would help ensure that music plays on after the lockdowns are lifted. 

"With so many artists and songwriters off the road, we could see an incredible amount of inspiring music moving into 2021 because artists will have the resources to create those albums," Abbott concludes. "Encouraging and incentivizing artists to create more music will result in a renewed enthusiasm to tour again when the smoke clears."

After thanking the members of the Texas congressional delegation, who already signaled their support of the legislation, Abbott called on other Texas-based members of the music community to take action, stating, "I urge all Texans to contact their congressional representative and ask them to support the HITS Act, too. Let's hope Congress can give us a little victory."

Read Josh Abbott's full opinion piece in the Austin American-Statesman.

Take Action: Ask Congress to Co-sponsor the HITS Act