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ISRAELITE TO DSPS: SHOW US THE MONEY

As you've probably read, the Mechanical Licensing Collective is in effect. That’s the entity mandated by the passage of the Music Modernization Act to serve as licensing and admin agent collecting digital monies. There were dueling proposals for the composition of the MLC, but the one that prevailed was assembled by the NMPA and has a board consisting of folks from the top major and indie pubcos (full list in story linked below). NMPA boss David Israelite compares the MLC to SoundExchange, “but instead of for artists, it’s for songwriters—and instead of for performance rights, it’s mechanical rights.”

The whole thing has a year to establish its budget (with arbitration via the Copyright Royalty Board, if necessary) and should be in effect on the first day of 2021. The upshot of all of this, the pubs and songwriters involved believe, is a greater influx of cheddar. “This source of revenue is going to become increasingly important to songwriters as streaming grows,” Israelite notes, “and while we will separately be fighting about the rates, this process is about how whatever money they do owe us gets into the right hands in the right way.”

He adds that DSPs have been sitting on a big pile of “unmatched” money—which the MLC will help allocate properly—but won’t say how much. “That is reprehensible,” Israelite contends. “They should be coming forward in a transparent and public way, identifying how much money they have so that everyone can start preparing for how to deal with that money. I am calling on them to come forward and disclose the money that they're sitting on. So far, they haven't done it, which is shameful. They’re going to have to do it at some point, so there’s no reason to wait.” Stay tuned for updates.

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