Unclaimed Royalties Study

As directed by the Music Modernization Act (MMA), the U.S. Copyright Office is undertaking a public study to determine the best practices that the Mechanical Licensing Collective may implement to effectively identify copyright owners and unclaimed royalties of musical works while encouraging copyright owners to claim royalties and ultimately reduce the occurrence of unclaimed royalties. To initiate this study, the Office held an all-day educational symposium from 8:30 a.m. to 6:00 p.m. on December 6, 2019, at the Library of Congress's Madison Building, to facilitate discussion on these issues by broad industry participants and other interested members of the public. Further information about the symposium may be found in the Office’s Notice.

As background, the MMA modified the existing section 115 “mechanical” license for reproduction and distribution of musical works in phonorecords into a blanket license for digital music providers to engage in activities covered under the statute (namely, permanent downloads, limited downloads, and interactive streaming). This blanket licensing regime is designed to reduce the transaction costs associated with the previous song-by-song licensing process by commercial services that want to offer as much music as possible while ensuring fair and timely payment to all creators of the musical works used on these digital services.

On July 8, 2019, the Copyright Office designated a mechanical licensing collective (MLC) and a digital licensee coordinator (DLC) to carry out key functions under the statute. The MLC’s responsibilities include collecting and distributing royalties associated with uses by digital service providers, identifying musical works embodied in particular sound recordings, administering a process by which copyright owners can claim ownership of musical works (and shares of such works), establishing a musical works database relevant to these activities, and distributing unclaimed accrued royalties.

The MMA also directs the Office to conduct a policy study, in consultation with the Government Accountability Office, recommending best practices that the MLC may implement to carry out these duties, and instructs the MLC to carefully consider and give substantial weight to these recommendations.

The educational symposium is the first step in this study, and a transcript and video of the event will be made available on this website. In 2020, the Office will separately issue a Notice of Inquiry soliciting written comments and also expects to announce roundtables for additional public input on the Unclaimed Royalties Study.