Unclaimed Royalties Study Kickoff Symposium

As directed by the Music Modernization Act (MMA), the U.S. Copyright Office is undertaking a public study, in consultation with the Government Accountability Office, to recommend best practices that the Mechanical Licensing Collective (MLC) may implement to effectively identify and locate copyright owners with unclaimed royalties of musical works, encourage copyright owners to claim accrued royalties and ultimately reduce the incidence of unclaimed royalties.

To initiate this study, the Office held an all-day educational symposium 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. The educational symposium was the first step in the Office’s study, and a transcript and videos of the symposium are available for the public’s review.

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 and a digital licensee coordinator 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.

This symposium, along with a report on CMO practices by Susan Butler, are provided as baseline informational material for the public to reference in replying to a notice of inquiry seeking public comment in connection with the Office’s policy study regarding best practices the MLC may implement to reduce the overall incidence of unclaimed royalties.