Legal Publishing Royalties February 6, 2019

Music Modernization Act: Labels and Publishers Back NMPA’s Bid to Run New Mechanical Rights Society

The United States is about to get an important new collection society, which is expected to oversee hundreds of millions of dollars in royalty payments each year.

When President Donald Trump passed the Music Modernization Act last year, it came with a caveat: the US Copyright Office (USCO) must exclusively empower a single entity, the Mechanical Licensing Collective (MLC), to license and administer mechanical rights in the United States.

The MLC’s operation will be funded by admin fees paid by digital services, who will be able to obtain a blanket streaming mechanical license from the body – covering all music used in the US. This means that the likes of Spotify can avoid the legal headache of lacking mechanical licenses for individual songs amongst the tens of millions of tracks on its service.

The MLC will collect the appropriate license fees from these digital services, as well as reporting royalty statements to songwriters and publishers and, crucially, making the associated payments to rightsholders.

Today, the National Music Publishers Association (NMPA) has reminded the world why it thinks it deserves to run the MLC, and has been backed by a raft of music industry players, including Universal Music Group, Sony Music Entertainment, Sony/ATV and Warner Music Group.

The NMPA, in tandem with the Nashville Songwriters Association International (NSAI) and the Songwriters of North America (SONA) says it is being supported in its bid by the “overwhelming majority of copyright holders who together represent the majority of musical works in the US”.

These rightsholders include a multitude of songwriters, plus both the publishing and record label operations at Universal, Sony and Warner. The NMPA’s other supporters include the likes of BMG, Kobalt, Concord, Disney Music Publishing, Downtown, Round Hill, Reservoir, Big Deal Music, peermusic, Wixen, ABKCO and Big Machine Music.

Anyone wishing to be considered by the US Copyright Office to manage the MLC must file their application by March 21. A final decision on the victorious party will be made in early July.

Only one other entity so far has publicly thrown its hat into the ring for the MLC contract.

Startup the American Music Licensing Collective (AMLC) was co-founded by Stewart Copeland (songwriter and member of The Police), and counts the likes of PledgeMusic founder Benji Rogers and Audiam founder Jeff Price on its board. Larry Mestel, CEO of Primary Wave, was initially announced as a board member of the AMLC last year, but since appears to have stepped down.

The NMPA is strongly making the point today that the Music Modernization Act (MMA) legally requires that the MLC is “endorsed by, and enjoys substantial support from, musical work copyright owners that together represent the greatest percentage of the licensor market for uses of such works in covered activities”.

David Israelite, CEO and President of the NMPA, told MBW: “We’re going public with this very long list of endorsements today because it demonstrates that ours is the true industry consensus bid, and that there isn’t any real competition.”

Added Israelite: “The [MMA] says that the Register of Copyrights must choose the candidate [to run the MLC] which represents a majority of owners of music works. If you look at both the publishers and writers who have endorsed our bid already, we are the only [party], clearly, that represents that majority. Our application will therefore be the only one that meets the statutory definition.

“We expect that all of the groups endorsing us here are endorsing us exclusively; they will not be offering support to any other bidder.”

Further endorsements for the NMPA come from the likes of SoundExchange and SESAC, owner of the Harry Fox Agency (HFA). Both SoundExchange and HFA are in contention to become permitted admin partners of the MLC; the MLC can use multiple vendors.

As part of its announcement today, the NMPA also revealed the individuals who will sit on its MLC Board and Committee, as well as launching the MLC website, SongConnect.org.

In addition, it launched a website where songwriters and artists who support the MLC can officially endorse: SupporttheMLC.com/home.

The full list of company endorsements for the NMPA bid includes:

The NMPA’s MLC Board and Committee appointments include:

MLC Board of Directors: Jeff Brabec (BMG), Peter Brodsky (Sony/ATV), Bob Bruderman (Kobalt), Tim Cohan (peermusic), Alisa Coleman (ABKCO), Scott Cutler (Pulse Music Group), Paul Kahn (Warner/Chappell Music), David Kokakis (Universal Music Publishing), Mike Molinar (Big Machine Music), Evelyn Paglinawan (Concord Music), Kara DioGuardi, Oak Felder, Kevin Kadish and Tim Nichols

MLC Unclaimed Royalties Oversight Committee: Phil Cialdella (Atlas Music Publishing), Patrick Curley (Third Side Music), Michael Eames (PEN Music Group), Frank Liwall (The Royalty Network, Inc.), Kathryn Ostien (TRO Essex Music Group), busbee, Kay Hanley, David Lowery, Dan Navarro and Tom Shapiro

MLC Dispute Resolution Committee: Alison Koerper (Disney Music), Ed Leonard (Daywind), Sean McGraw (Downtown), Debbie Rose (Shapiro Bernstein), Jason Rys (Wixen Music), Aimée Allen, Odie Blackmon, Gary Burr, David Hodges and Jennifer Schott

MLC Operations Advisory Committee: Joe Conyers III (Songtrust), Scott Farrant (Kobalt), Rell LaFargue (Reservoir Media Management), John Reston (Universal Music Publishing), Bill Starke (Sony/ATV) and Michael Lau (Round Hill Music) *remaining digital company seats to be announced

The Board and Committee seats were designated by the MMA and the selections were chosen by two advisory groups.

The publisher advisory group included: Kenny MacPherson (Big Deal), Teri Nelson Carpenter (Reel Muzik Werks), Caroline Bienstock (Bienstock Empire, Inc.), Julie Lipsius (Lipservices), John Ozier (ole) and Matt Pincus

The songwriter advisory panel included: Steve Bogard (NSAI), Dallas Davidson (BMI), Chris DeStefano (NSAI), Bob DiPiero (BMI), Dan Foliart (ASCAP), Adam Gorgoni (SONA), Michelle Lewis (SONA), Paul Williams (ASCAP) and Lynn Gillespie Chater (SGA)

Source: Music Business Worldwide

Music Modernization Act: Labels and Publishers Back NMPA’s Bid to Run New Mechanical Rights Society

The full list of company endorsements for the NMPA bid includes:

The NMPA’s MLC Board and Committee appointments include:

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