Apple, Spotify And Other DSPs Pay $424 Million In Unmatched Royalties For Publishers, Songwriters
The Mechanical Licensing Collective has received a total of $424.38 million in accrued historical unmatched royalties from digital service providers, together with corresponding data reports that identify the usage related to these royalties.
Twenty digital service providers—including Apple Music, Amazon Music, Google GOOG -0.6% GOOG -0.6%, Pandora and Spotify—separately transferred accrued historical unmatched royalties to the Collective, which was designated by the U.S. Register of Copyrights in July 2019 pursuant to the Music Modernization Act of 2018. The MLC, as of January 2021, is responsible for administering the new blanket compulsory license for the use of musical works by digital music services.
“It’s a big day, this is what we’ve all been waiting for,” says Michelle Lewis, executive director of Songwriters of North America (SONA), who notes the sum “is more than we were expecting.”
The largest royalties, by a long shot, were paid out by Apple Music, at $163.34 million, and Spotify at $153.23 million. They’re followed by Amazon Music at $42.74 million, Google at $32.86 million, Pandora at $12.36 million, Soundcloud at $10.17 million, Tidal at $6.8 million and iHeartRadio at $1.34 million.
“Songwriters and music publishers have for years fought to ensure they were paid accurately and fully by digital streaming services. ‘Unmatched money’ has plagued the industry and today, thanks to the Music Modernization Act, we know that it amounts to just under $425 million—not including money previously paid out in multiple million dollar settlements,” says NMPA president/CEO David Israelite.
“This significant amount proves just how broken the system was, how much the MMA was needed, and how much songwriters have to benefit from the protections it has put in place. At long last, that money can make its way to its rightful owners. This is a massive win for music creators and the streaming services themselves. The Mechanical Licensing Collective obtaining this historically unmatched money, doing the research to find its owners, and giving copyright owners a transparent process to claim what is theirs is exciting progress that paves the way for the future growth of streaming that will benefit the entire industry.”
The rest of the MLC list rounds out as follows: Deezer SA $998,338, AudioMack $490,1243, LiveXLive $400,000, Hoopla $278,991, Qobuz $106,893, GTL $98,345, Wolfgang’s $18,409, Mixcloud $13,650, WeavRun $12,711, FanLabel $4,748, Karaoke Version $2,087 and Pacemaker $278.
“Today marks a critical milestone in the new mechanical licensing regime established by the Music Modernization Act two years ago,” says Digital Licensee Coordinator representative Garrett Levin.
“These royalties are a small fraction of the overall mechanical royalties that have been paid out during that time period. The MLC now has in one centralized operation the usage data and corresponding royalties that are critical components for delivering on the promise of the MMA and allowing the MLC to meet its commitment to efficiently and effectively distribute royalties to those who have earned them.”
In addition to their payments, the DSPs also delivered more than 1,800 data files, which contain in excess of 1.3 terabytes and 9 billion lines of data. The MLC is now reviewing and analyzing the data in order to find and pay the proper copyright owners. No easy task.
“It’s a huge job,” Lewis says. “The idea is to get that huge number down as low as possible and match as much as we can, and that’s going to take industry-wide effort, a ton of education of songwriters and publishers to really use the public database and the claiming process.”
Kay Hanley, co-executive director of SONA, chairs the MLC’s Unclaimed Royalties Oversight Committee, the body responsible for dispersing the funds. The MLC anticipates doling out the first royalty payments and statements in April 2021.
The transfer of these monies represents the culmination of a months-long effort on the part of the MLC and the participating DSPs to develop and implement the specifications for these usage reports.
The MLC will provide additional information about historical unmatched royalties on a newly created page on its website, “Historical Unmatched Royalties.”
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