The Digital Music Royalties Landscape

Where does The MLC fit in?

The Digital Music Royalties Landscape is complex. Copyright law establishes a number of different rights for both musical works and sound recordings, and each of these rights has the potential to produce its own separate royalty stream. For more information about the differences between Musical Works and Sound Recordings, and between different types of digital services offerings, visit the Music Industry Terminology page of our FAQs.

The MLC plays a critical role in administering royalties for a specific set of rights for musical works — digital audio mechanical royalties. However, The MLC does not replace other organizations like SoundExchange and the various performing rights organizations (PROs) in the United States, which administer royalties for other rights.

The graphic below shows several of the royalty streams related to the digital distribution of music and some of the key organizations that administer those royalties.

 

 

 

 

Key organizations

The Mechanical Licensing Collective (The MLC)

The MLC collects digital audio mechanical royalties from eligible streaming and download services in the United States who elect to secure a blanket compulsory license (created by section 115 of the U.S. Copyright Law) from The MLC and pays them to its Members: music publishers and administrators; ex-US collective management organizations (CMOs); and self-administered songwriters, composers and lyricists. The MLC is the only organization in the United States authorized to administer the blanket compulsory digital audio mechanical license and related royalties. If you are based outside of the U.S., you may have a choice to either join The MLC or have a mechanical rights organization based in your home country collect your royalties from us. Contact the organization in your home country to determine your options. Click here for a list by country.

Organizations that pay Voluntary Mechanical Royalties 

These organizations fall into two sub-categories — companies who provide licensing and royalties administration services to publishers and digital services who have entered into voluntary digital audio streaming mechanical licenses and record companies who secure voluntary mechanical licenses for downloads. In both cases, they typically pay royalties to music publishers, publishing administrators, and self-administered songwriters, composers and lyricists.

Performing Rights Organizations

These organizations, often referred to as PROs for short, collect performance royalties from entities responsible for presenting the performance, such as radio stations, night clubs and digital service providers and pay them on to songwriters, composers, lyricists, music publishers and publishing administrators. There are several performing rights organizations in the United States, including ASCAP, BMI, AllTrack, SESAC and GMR. If you are based outside of the U.S., contact one in your home country to explore your options. Click here for a list by country.

Sound Recording Distributors and Aggregators

These organizations provide distribution services to sound recording copyright owners, including self-released recording artists. In some cases, a record distributor may be a division in a global entertainment company which also owns record companies. In other cases, it may be a stand-alone company.

SoundExchange

SoundExchange collects sound recording digital performance royalties from non-interactive digital streaming services and digital radio providers who elect to secure a statutory license in the United States (created by sections 112 and 114 of the U.S Copyright Law) and pays them to featured artists, non-featured artists and sound recording copyright owners. SoundExchange is the only organization in the United States authorized to administer the statutory sound recording digital performance license and royalties. If you are based outside of the U.S. this can be complicated! Contact one in your home country to explore your options. Click here to see a list by country.