The Nashville Songwriters Association International (NSAI) appreciates the opportunity to submit comments related to the redesignation of The Mechanical Licensing Collective (The MLC) as the entity to administer the blanket statutory mechanical license for the reproduction and distribution of nondramatic musical works. NSAI fully supports redesignation of The MLC and we believe that there is no other organization that could fulfill the mission of administering the blanket statutory mechanical license in the way the Music Modernization Act (MMA) envisioned.
As the Office references in its notification of inquiry regarding this matter, the Music Modernization Act requires that the entity designated to administer the blanket statutory mechanical license meet three basic criteria: (1) be a single nonprofit entity, not owned by any other entity, created by copyright owners; (2) be endorsed by and enjoy 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;
(3) possess the administrative and technological capabilities necessary to carry out a wide array of responsibilities associated with administering the blanket license. The MLC has demonstrated in its submission and in practice over the last four years that it more than adequately meets these criteria. It is a source of great pride for NSAI that we were early architects of The MLC, envisioning what it could be in the very early 2000s through the drafting of the Music Modernization Act. NSAI literally helped create its framework before the MLC had a budget or a staff – prior even to the MLC receiving initial designation. NSAI continues to help navigate the operation and improvements to the MLC as we serve on the Board of Directors as a non-voting member representing the interests of songwriters. We always had high hopes for The MLC’s success, but it has exceeded those in the three short years it has been in full operation distributing more than $2 billion in royalties, achieving historically high match rates and providing an invaluable service to copyright owners, songwriters and digital service providers (DSPs).
Prior to The MLC’s initial designation, NSAI had identified three equally important key benchmarks that we felt were of the utmost importance for songwriters as we transitioned to a blanket licensing system for the distribution of American digital mechanical royalties. The first was customer service. Self-published songwriters had long been frustrated with digital rights management companies who largely seemed disinterested or ill resourced to being helpful to rightsholders without a significant market share. The MLC took this concern to heart and prioritized hiring many human customer service representatives specifically trained and assigned to assist self-published songwriters and even published songwriters who have questions and concerns related to their digital mechanical royalties. This, in addition to creating software designed to accomplish this part of its mission.
The second key benchmark for songwriters was transparency. Statutorily mandated visibility into the mechanical rights database was a victory for songwriters in the MMA and we felt it paramount that that visibility be easy to understand and navigate. The MLC built a publicly accessible database that is clear and concise, easily navigable and provides as much information as the MLC can publicly disclose.
The third key benchmark NSAI identified was education. Transitioning to a blanket license for digital mechanical uses was an enormous change from the status quo and would require an unprecedented education effort, awareness and outreach particularly to self-published songwriters, many of whom may have never known how to collect those royalties previously or found the exercise cost prohibitive. The MLC took their mission to outreach and educate very seriously and have strategically positioned themselves in any and all places where a self-published songwriter might take notice. They have also been very thoughtful in how they crafted their public message and sign-up process to lower the barrier to entry for anyone no matter how many or few copyrights they might have to register. NSAI feels confident that more self-published songwriters are collecting digital mechanical royalties now than ever before because of the outreach and education work of The MLC along with its board and committee members.
While NSAI is very complimentary of the work The MLC has done to date, no organization is perfect and there is always room for improvement. Redesignation is an opportunity to review such areas for improvement as well as to tout successes. NSAI has been insistent for quite some time that the MLC must prioritize developing a songwriter portal. Songwriters who do not own their own publishing are identifying errors in the data they can see in the public portal resulting in non-payment, but their only recourse when they find these errors is to contact their publisher to make them aware. We have heard complaints from writers whose publishers are not responsive when made aware of these issues, particularly in cases where the amount of unpaid royalties is low. We feel strongly that The MLC has a role to play in assisting songwriters with this issue and have requested that it develop a songwriter portal to the database that would allow a songwriter who finds errors in data related to his/her songs to “flag” those errors alerting the publisher of record and creating a consolidated paper trail at The MLC. This songwriter portal will streamline the process of making corrections for publishers; it will give songwriters an easy and trackable way to actively participate in making sure their data is correct (a stated goal of the MMA); and, all parties win when errors are corrected and royalties are paid out appropriately.
Further, NSAI feels that The MLC policy with respect to statutory terminations is being appropriately revisited by the USCO. We look forward to an expeditious finality to the Office’s determination, a policy change at The MLC and the ability to appropriately direct digital mechanical royalties to songwriters who have terminated their copyrights. We encourage the USCO, as we have done for months, to expedite their Rulemaking process on this matter in favor of the American songwriters the MLC was created to service.
Finally, NSAI believes that The MLC needs to prioritize creating a strategy around its eventual market distribution of historic unmatched royalties. There is a necessary sequence of events that must begin in earnest in order to appropriately fulfill the obligation of the law. The specific outline for how unclaimed royalties should ultimately be distributed in the MMA was a demand of NSAI during negotiations while drafting the bill. The MMA proscribes a fair way to distribute the historic royalties. Effectuating it requires that The MLC have access to historical usage reports from the DSPs from before the existence of The MLC, which it does not currently. It will be necessary to formulate and publish a written timeline of when and how unclaimed royalties from specific periods will be distributed. Public notice of an impending distribution will be the only way to motivate owners who have not prioritized claiming their royalties.
In conclusion, NSAI would like to reiterate its wholehearted endorsement of The MLC for redesignation as the entity to administer the blanket statutory mechanical license for the reproduction and distribution of nondramatic musical works. While there will always be areas one can identify for improvement, that should not overshadow the fact that The MLC has exceeded everyone’s expectations in its first four years of operation. It is efficiently and effectively licensing, collecting, and distributing royalties in a way our industry has not seen before.