MLC Auditing Streaming Services for First Time

Kenya Grace signs global publishing admin deal with Warner Chappell. The Mechanical Licensing Collective plans to audit digital service providers.

Kenya Grace has recently signed a global publishing admin deal with Warner Chappell, marking a significant milestone in her music career. This new partnership will allow her to expand her reach and access new opportunities in the music industry.

In other news, the Mechanical Licensing Collective (the MLC) has announced its plans to audit all digital service providers (DSPs) operating under the compulsory blanket license administered by the MLC. This includes a wide range of companies that license music, such as on-demand streaming services, internet radio companies, and music apps. The audits aim to ensure the accuracy of reported and paid royalties, in line with the measures already taken by the MLC.

The MLC has emphasized its commitment to updating its members on the results of any DSP audits and clearly identifying any recovered monies on royalty statements. This move is in accordance with the Music Modernization Act (MMA), which grants the MLC the right to audit and be audited. The MMA was a landmark law that created a new blanket license for musical work mechanicals, replacing the previous song-by-song licensing system.

The establishment of the MLC was a response to issues with the old licensing system, which resulted in a pool of $427 million in unmatched and unpaid publishing royalties. The MLC's role is to distribute these royalties and administer the new blanket license moving forward.

The announcement of the MLC's auditing plans comes after Bridgeport Music, a company representing George Clinton and Funkadelic, exercised its right to audit the MLC. This move is significant given Bridgeport Music's history of aggressive copyright enforcement.

The MLC has appointed music industry audit veteran Jane Bushmaker to oversee DSP audits, which will be conducted by experienced outside audit firms. According to Kris Ahrend, CEO of the MLC, ensuring accurate reporting of royalties is a statutory responsibility under the MMA. Alisa Coleman, chair of the board of directors at the MLC, emphasized the audit right as a historic development in the U.S. compulsory mechanical license.

Overall, the MLC's efforts to ensure transparency and accuracy in royalty reporting reflect a commitment to protecting the rights of songwriters and music publishers. The list of companies that the MLC intends to audit includes a diverse range of digital service providers, signaling a comprehensive approach to ensuring compliance with licensing regulations.

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