Nashville Songwriters Association-backed group will operate new licensing collective - Southern Business Review

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Friday, July 5, 2019

Nashville Songwriters Association-backed group will operate new licensing collective



The U.S. Copyright Office chose the bid backed by the National Music Publishers Association and the Nashville Songwriters Association International to run the new digital licensing organization.

The creation of the new licensing group was a vital component of the Music Modernization Act, which President Donald Trump signed into law last year.

The Music Licensing Collective, which was backed by the publishers, songwriters and virtually every other major music industry trade association, beat out a competing bid by the American Music Licensing Collective.

Because of its vast industry support, the MLC was viewed as the favorite to win the bid. Under the new law, the MLC will be in charge of identifying and paying copyright holders the royalties they are owed when their music is played on a streaming service.

Streaming companies will pay for the operating expenses to run the MLC.

“This has been a long, deliberative process and we are pleased with the result," NMPA President and CEO David Israelite said. "The Copyright Office set a high bar and the team behind the MLC submission was transparent, thorough and representative of the entire music publishing and songwriting community. We look forward to seeing the benefits of the Music Modernization Act come to fruition."

The application to run the new licensing collective was divided on the issue of how unclaimed royalties will be paid out. The Music Modernization Act calls for the royalties to be paid out after a waiting period based on a songwriter and publisher's market share.

The AMLC said it would follow the law, but contended the MLC is conflicted since its board is well represented by major publishing companies that will claim the majority of the unclaimed funds.

"As we now move to the funding phase, it is critical that the digital services commit to supporting the MLC properly and become more transparent, starting with disclosing the amount of unmatched money currently at their companies," Israelite said.

The MLC officially takes over Jan. 1, 2021, leaving about 18 months for the group to solidify its board, set a budget, and choose a technology vendor that will be in charge of building the database and paying out royalties.

The Digital Media Association, the trade group that represents the streaming services, will appoint six members to the MLC's operations committee.

The new MLC board of directors must choose a city for its headquarters and hire its staff as well.

"The lengthiest part of this is getting the data where we need it to be," said NSAI executive director Bart Herbison. "But all of those other things have to happen first. So there's a lot of work to be done."

More: Music execs launch bid for industry oversight following passage of Music Modernization Act

More: Trump, flanked by Nashville artists, signs landmark Music Modernization Act into law

Herbison said it was a gratifying turn of events for the bid backed by NSAI to win the right to run the new licensing group. Songwriters are banking on the MLC's implementation translating to higher royalties and more accurate payouts.

"We've been working on components of this for going back 15 years, so this is a good day for songwriters," Herbison said.

Under the MMA, songwriters can no longer sue streaming companies for incorrectly licensing their work. But the streaming services will pay for the operation of the MLC and by controlling the royalty payouts, stakeholders predict the process will be better run.

"We look forward to sharing that knowledge and working collaboratively with MLC Inc. to establish a comprehensive, effective and cost-efficient mechanical licensing system that is governed by specific and measurable success metrics as intended by the MMA," Digital Media Association CEO Garrett Levin said.

Reach Nate Rau at 615-259-8094 and nrau@tennessean.com. Follow on Twitter @tnnaterau.