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New music licensing group’s path to power comes with some criticism

The Music Modernization Act is unquestionably a big deal. A recent article on the MMA describes the federal legislation as “the first major update to U.S. law in a generation.”

What the MMA centrally provides for is the establishment of a nonprofit group commanding broad industry support to act as digital licensing authority. That organization is slated to oversee and collect royalties owed songwriters and copyright owners whose works are featured on musical streaming services.

The group Mechanical Licensing Collective is widely endorsed as the favored candidate for the job. Its board of directors comprises songwriters and publishers. The above-cited media report on the MMA notes that the MLC has unanimous backing from “virtually every corner of the music industry.”

Not all corners, though. An organization called the American Music Licensing Collective is also vying for the role of licensing-and-royalty-distribution czar. That group stridently criticizes the MLC for an alleged conflict of interest.

It argues specifically that the large music publishers on the MLC’s board will benefit disproportionately in the distribution of unclaimed royalties. The new law provides that those will be distributed among artists in the event they are unclaimed by a certain time. The AMLC alleges that MLC leadership will result in money knowingly distributed “to the wrong owners.”

MLC board members strongly dispute the point, and underscore the concern as merely being an “incendiary” scare tactic. They stress that the base viability underpinning the MLC rests on its composition of songwriters and industry participants who will be scrupulously fair concerning royalty matters.

“There’s a reason that every major stakeholder in the music industry has gotten behind our bid,” says one MLC principal.

The U.S. Copyright Office will reportedly designate the new licensing organization later this summer. The MLC’s confirmation seems an almost certain bet, notwithstanding the challenge from the AMLC.

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